Government-owned Nakheel Properties, developer of Dubai's palm-shaped islands, said it was launching a 4.4 billion dirham ($1.2 billion) syndicated loan.

The facility, which matures in January 2011, includes a conventional and an Islamic tranche and may be funded in either dollars or dirhams, Nakheel said in a statement to the Dubai International Financial Exchange, where it has a listed Islamic bond.

Emirates NBD, Mashreq Bank, Noor Islamic Bank, and Samba Financial Group are the initial lead arrangers, underwriters and bookrunners of the facility.

"The size of each tranche will be finalised after syndication, and potential financiers are invited to participate in either tranche or currency. Proceeds of the facility will be used by Nakheel for its general corporate funding needs," Nakheel said without giving further financial details.

Nakheel's CEO Chris O'Donnell told Reuters on Wednesday that the developer will decide on a public listing in the next 12 months as it expands rapidly in the Gulf and abroad.

The company is looking to purchase assets in the United States, Britain and Australia in the next 12-18 months following a slump in property prices, he said.

Banking sources said in July that the Government of Dubai was raising to $32.5 billion this year from $16 billion its state-backed borrowing in the syndicated loan market for its commercial subsidiaries, and is turning to European and Asian lenders to counter a lack of liquidity among local banks. - Reuters