Emirates REIT plans to buy-back $400 million in bonds to improve its balance sheet.

Emirates REIT, a sharia-compliant real estate investment trust headquartered in Dubai, is contemplating buying back some of it’s nearly $400 million in Islamic outstanding bonds to boost its balance sheet, three sources told Reuters.

Given the economic pressures induced by the coronavirus pandemic, which is worsening an already stagnant property sector in Dubai, the idea is one of a number that the organization is looking into.

The company is also contemplating refinancing Islamic bonds or sukuk, two of the sources said, adding that talks with local banks have collapsed partly due to their exposure to distressed hospital operator NMC Health, which restructures talks with lenders.

At a recent earnings call, Emirates REIT Chief Executive Sylvain Vieujot said a possible sukuk buyback was briefly discussed.

Refinitiv data shows that the sukuk, maturing in 2022, traded on Tuesday at less than 60 cents on the dollar with a yield of 27.6% compared to 6.1% at the end of 2019. They were released with a coupon of 5.125% in December 2017.

As of the end of 2019, Emirates REIT had $48.4 million in cash, according to a statement on their website. Its shares traded at $0.22 on Tuesday, compared with a net asset value (NAV) of $1.57 per share at the end of last year.