Saudi Arabia hired Citigroup, JPMorgan Chase and HSBC as global coordinators on its international Islamic bond sale. The kingdom also picked Deutsche Bank and BNP Paribas among others as lead managers for the sale. The sukuk could come as soon as this month. Saudi secretary-general of the Finance Committee, Mohammad Al Tuwaijri, announced in December the kingdom's plans to raise between $10 billion and $15 billion from international bond markets in 2017 and sell about 70 billion riyals locally. The world’s biggest oil exporter is considering international and domestic debt issues to help finance its budget deficit.
According to the fourth annual BNP Paribas Individual Philanthropy Index by Forbes Insights, the United States remains the leader globally in personal philanthropy. Europe comes in as a close second, followed by Asia, with the Middle East achieving the sharpest increase in philanthropic giving. Almost all countries were focused on Health as the top area of philanthropic giving (United States at 60%), while Asia as a region chose Environment.
BNP Paribas-INCEIF Centre for Islamic Wealth Management (CIWM) organised a conference on "Malaysia, the Future Global Private Banking Hub: Opportunities and Challenges". It showed that current trends towards regional financial integration have presented significant opportunities into the pool of savings of Asia’s expanding middle class, now more than 2.6 million high net worth individuals. These trends show the increasing demand for private banking by HNWIs with taste for more sophisticated consumer finance and wealth management products.
According to the finance minister, Luxembourg has issued its first 200 million euro ($254 million) five-year Islamic bond, distributed across 29 accounts, although the market favours dollar-denomineted sukuk. Nevertheless the country thereby becomes the first AAA-rated government to issue euro-denominated sukuk, or Islamic bonds, following London, Hong Kong and South Africa. Luxembourg hired HSBC, BNP Paribas, Banque Internationale à Luxembourg and Qatar-based QInvest to arrange its sukuk.
Such is the hype of activity about Shari’a-compliant product at the moment that even The Grand Duchy of Luxembourg has now moved a step closer towards the issuance of a debut sukuk. The government presented a draft bill to parliament that could get deal going, proposing the issuance of a €200m-equivalent sovereign sukuk denominated. Euros or US-Dollars, both are welcome. Additionally, the Luxembourg government has also identified three real estate assets to underpin the transaction.
Kingdom Tower, the Saudi skyscraper set to be the world’s tallest building, will probably have construction funding in place by the end of the first half. The developer Jeddah Economic Co. is in talks to bring in Riyadh-based Alinma Bank as an adviser and lender. BNP Paribas (BNP) SA is currently advising the company, but the size of loan being sought hasn't been disclosed. The builder has been looking for financing since at least April 2012. Kingdom Holding Co. and partners, including tower builder Saudi Binladen Group, are trying to arrange funding after investing 8.7 billion riyals ($2.3 billion) in the project. They are seeking a bank loan with a maturity of five to seven years.
The New York Department of Financial Services (DFS) has asked half a dozen European banks to submit their official records pertaining to their financial dealings with Turkey's Uzan family. The six banks covered by the order are France based BNP Paribas, Societe Generale and Credit Agricole; Commerzbank and Deutsche Bank of Germany and Standard Chartered. The state banking regulator is investigating the case over the illegal business dealings with Uzans. Standard Chartered assured its full co-operation with the regulators, while representatives of the other European banks either declined to comment or did not respond to requests for comment.
Ahmad Hamad Algosaibi & Brothers plans to make a new offer on US$7.2 billion of debt to creditors as it seeks to bounce back from the Middle East's biggest corporate default. The Saudi Arabian company, which runs a bottling plant for PepsiCo Inc. (PEP) products in the kingdom and has interests ranging from finance to shipping, will propose the new deal in the coming months, according to its Chief Executive Officer Simon Charlton. Creditors rejected a proposal from Algosaibi four years ago. The new debt proposal will include some upfront payments and those spread over a longer time. However, terms of the revised deal are likely to be less favorable than the initial offer. Charlton said Algosaibi plans to borrow from local and international banks once the restructuring is resolved.
The last couple of years of financial crisis proved to be unfavourable for the international banking sector. Nevertheless, one sub-sector was growing rapidly and reached significant success - Islamic finance. The majority of people still have not enough understanding and appreciation for Islamic finance. However, the facts show it is a US$1.3 trillion global industry with annual growth of 15% to 20%. During the past few years alone this sector has expanded to even not particularly expected markets adding to the portfolios of conventional international banks. The latter have already made the development of sharia-compliant services a priority.
The banks that will advise the sukuk sale of Bahrain are: Citigroup, BNP Paribas and Standard Chartered. This is chasing Bahrain's government raising the public debt ceiling by BD1bn ($2.65bn) to BD3.5bn.
Islamic Development Bank (IDB) is going to issue a benchmark dollar-denominated Islamic bond. So far they have limited to government-linked and high-rated bonds.
Arrangers are : BNP Paribas, HSBC, Standard Chartered and Deutsche Bank.
BNP Paribas (BNPP.PA) named Tariq Al-Samahiji as global head of its Islamic finance and investments business and chief executive of the bank's Islamic finance arm, Najmah. Al-Samahiji will be based in Bahrain, which is the bank's regional hub, and the appointment is effective from Sept. 1.
The possibility of the first sovereign or corporate sukuk origination out of France took a step nearer when the French government announced that it had passed new instructions to facilitate the introduction of sukuk, Ijara, Murabaha and Istisna products in France.
It is claimed that France now has a tax neutrality regime in place for facilitating Islamic financial products including Islamic bonds and certificates; cost-plus-financing; leasing and construction industry forward financing.
French banks such as Societe Generale, BNP Paribas, UBAF, Calyon (Banque Credit Agricole) have long been involved in global Islamic finance. BNP Paribas for instance recently listed its first Islamic exchange-traded fund (ETF) in Asia on Bursa Malaysia. Some two years ago it had advised the Malaysian Sovereign Wealth Fund, Khazanah Nasional Berhad, to launch its first Islamic ETF, MyETF i. The new measures are not limited to a particular transaction but form a basis for a framework for Murabaha, Istisna, Ijara and sukuk transactions which satisfy both French law and Shariah principles.
The Hedge Fund Review reported on 24 February that the Coffee trading advisor Eiger Trading Advisors has targeted a March launch for four coffee related funds. The funds aim to give investors exposure to the coffee markets through the choice of a hedge fund, a Shariah-compliant fund and two tracker funds. The funds will be domiciled in the Cayman Islands and will launch with approximately $150 million collectively.
The Shariah-compliant Eiger Green Coffee Fund will provide Islamic investors with access to coffee as an asset class. It aims for returns of around 12% a year. The company decided to launch the funds based on its understanding of the coffee industry and the growers. This, the company said, will enable it to exploit trades and generate attractive risk adjusted returns for investors. The funds will target mainly Middle Eastern investors but will not limit itself to particular investors.
The share class will be in dollars. Newedge will act as prime broker for the Coffee Alpha Fund and BNP Paribas will be the prime broker for the Green Coffee Fund. All three funds have a 2% management fee with a 20% performance fee with a high watermark.
BNP Paribas Investment Partners currently manages about half a billion USD in Sharia compliant assets and targets according to the chief executive MENA Tariq Al Samahiji to multiply this amount. The bank currently offers equity Sharia management and has recently started marketing its first Islamic bond or sukuk fund.
Al Samahiji expected the sukuk fund to attract investments from institutions and wealthy individuals, but stressed BNP would not market the fund to the retail market.
Gulf News reported on 19 April about the USD 400 mn, 5-year dual currency syndicated Ijara facility for the UAE-based Al Jaber Group.
BNP Paribas, Dubai Islamic Bank (through its investment banking arm, Millennium Capital Limited) First Gulf Bank, and National Bank of Abu Dhabi served as the underwriters and bookrunners for the transaction, which has been priced in both US dollar and UAE dirham. The syndicate comprised 7 banks.
Obeid Al Jaber is the Chairman of Al Jaber Group.