Sukuk

#Oman tightens price on $2bn #sukuk amid rush of orders

Oman's $2bn sukuk sale lured orders for more than three times the issue size. The sultanate set final terms on its seven year sukuk at 235 basis points over the mid-swap rate, from initial guidance of about 270 basis points. Landesbank Berlin Investor Lutz Roehmeyer said there was a good demand and now a rush to get an allocation with accepting even less yield. Alizz islamic bank, Citigroup, Dubai Islamic Bank, Gulf International Bank, HSBC Holdings, JPMorgan Chase and Standard Chartered are managing the deal. The country's last foray into international debt markets was a $5bn three part offering of dollar bonds in March.

#Oman starts marketing seven-year US dollar #sukuk

The Sultanate of Oman has started marketing a seven-year US dollar benchmark-sized sukuk offering at 270bp area over mid-swaps. Books are open for pricing via Alizz Islamic Bank, Citigroup, Dubai Islamic Bank, Gulf International Bank, HSBC, JP Morgan and Standard Chartered. The sovereign had signalled the possibility of an additional 12-year sukuk in its mandate. Expected issue ratings are Baa1 by Moody's and BBB by Fitch.

Sime’s #sukuk plan gets okay, crucial step to carve 3 listed companies

#Malaysian holding company Sime Darby has received approval from its bondholders to restructure US$800mil (RM3.46bil) worth of sukuk. Holders of the sukuk approved the company’s plan to buy back the papers or replace the borrower to Sime Darby Plantation from Sime Darby. The broader reorganisation of the group involves the proposed listing of Sime Darby Plantation and Sime Darby Property through share distributions. Sime Darby will remain listed, owning the automotive, industrial equipment and logistics businesses. The holding company plans to create three standalone businesses: plantation, property and trading, and logistics. Plantation and property would be listed on Bursa Malaysia, while trading and logistics would remain under Sime Darby.

#Qatar Islamic Bank's dollar #sukuk books top $1 billion -lead

Order books for Qatar Islamic Bank's planned dollar five-year sukuk have topped $1 billion. The senior unsecured deal is part of a $3 billion sukuk programme. It will be of benchmark size, which conventionally means upwards of $500 million. Initial price guidance for the Islamic bond was 145-155 basis points over mid-swaps. Citi, Emirates NBD Capital, HSBC, Noor Bank, QInvest and Standard Chartered Bank have been appointed to lead the transaction.

Islamic finance transaction broadens investor base for the Africa Finance Corporation

In 2016 the Africa Finance Corporation (AFC) sought to raise financing at competitive pricing levels to fund a number of new infrastructure projects in Africa. It also aimed to diversify its investor base in the process. This objective was achieved through the successful issue of a Murabahah Sukuk. The AFC initially sought to raise US$100 million, but upsized its issuance o $150 million and was still oversubsribed. Emirates NBD Capital, Mitsubishi UFJ Financial Group and Rand Merchant Bank acted as joint bookrunners and joint lead managers. Emirates NBD Capital also acted as the sole global coordinator. This transaction was awarded the 2017 Deal of the Year in the category Islamic Finance in Africa by The Banker magazine.

Hogan Lovells advises on the first #Sukuk to be listed on ISE's Global Exchange market

Hogan Lovells has advised Aktif Bank on the first Sukuk ever to be listed on the Global Exchange Market of the Irish Stock Exchange (ISE). The $118million Sukuk was issued under a mudarabah structure with GAP Insaat Yatirim ve D?s Ticaret, a Turkish construction company. While the Irish Stock Exchange has listed Sukuk historically, this is the first Sukuk to be listed on the ISE's Global Exchange Market. The Hogan Lovells team was led by Imran Mufti (Partner, Dubai), with support from Annalisa Feliciani (Counsel, Rome), Ahmet Kalafat (Senior Associate, Dubai) and trainees Marjun Parcasio and Luigi de Angelis. Onur Aksoy from Aktif Bank said this Sukuk represents a milestone for Islamic capital markets originating out of Turkey. He added that Aktif Bank was pleased to work with the Hogan Lovells team, benefitting from their deep understanding of Islamic finance and capital markets.

#UAE’s Dana Gas begins refinancing talks on $700 mln #sukuk

United Arab Emirates' energy producer Dana Gas has started refinancing discussions with the holders of its $700 million sukuk maturing in October 2017. The company has faced a cash shortage in the last period and is now planning to restructure its dollar sukuk which was issued in May 2013. Dana Gas CEO Patrick Allman-Ward refused to comment. The energy producer in April repaid an outstanding $60 million loan for its Zora gas field project in the UAE to avoid a breach on the facility. Dana is owed receivables of about $1 billion from Egypt and the Kurdistan Regional Government. Its cash balance as of the end of March was $298 million, slightly below $302 million as of the end of last year. To focus on cash preservation, the company reduced its operational and capital spending in the first quarter.

#Tunisia starts preparatory work for debut #sukuk issuance

The government of Tunisia is preparing its first ever issuance of a sukuk with the Tunisian stock exchange, Bourse de Tunis and Nasdaq Dubai. Preparation work will consider commercial, legal and regulatory issues, including sharia-compliance aspects. This January finance minister Lamia Zribi said that Tunisia needs about $2.85 billion in external funding in 2017 and plans to issue a sukuk of $500 million to cover its budget deficit. Then in February the North African country issued a €850 million bond with a seven-year maturity.

Dubai repays $600m #sukuk certificates

The Government of Dubai has announced that the $600 million (Dh2.2 billion) Sukuk Trust Certificates issued on May 2, 2012 reached maturity on May 2, 2017. Upon maturity, all the certificates were redeemed in full along with the accrued profit. According to Abdul Rahman Saleh Al Saleh, Director-General of the Department of Finance, this settlement reaffirms the government’s commitment to deal with its repayment obligations in a proactive manner. It also strengthens the government’s resolve to honour all its financial obligations on time.

CASE STUDY: Etihad Lands Largest #Sukuk Debut in #MENA #Aviation History

#UAE-based airline Etihad Airways tapped the Islamic finance market with the largest ever sukuk issuance in the MENA region’s aviation history. In November 2016, Etihad Airways made its debut on the debt capital markets with a benchmark US$1.5bn sukuk deal. Etihad was initially rumoured to be raising US$500mn, but there was strong demand and the company’s debut US$1.5bn sukuk became the highest rated paper from an airline issuer. The book consisted of high-quality investors from the MENA region, Asia and Europe, creating significant price tension that enabled Etihad to optimize pricing and issue size. Banks dominated the distribution cross-section (77%), while 13% of the notes were allocated to fund managers, 5% to private banks, 4% to insurance and pension funds, 1% to other investors. The 5-year sukuk was launched under the newly established Islamic Trust Certificate (Sukuk) programme and represented a landmark debt capital market transaction.

RAM: Q1 global #sukuk issuance at US$22.2bil

According to RAM Ratings, global sukuk issuance reached US$22.2 billion (US$1=RM4.33) at the end of March, a marginal decrease from US$24.1bil recorded in the same period last year. Malaysia maintained its leadership by accounting for 38.5% of the total issuance. The ratings agency said Indonesia was next (24.7%) followed by Qatar (9.9%) and the United Arab Emirates (9%). The outstanding global sukuk summed up to US$346.7bil, as at end-March 2017, with Malaysia maintaining its leadership by commanding 48% of the amount. Ruslena Ramli, Head of Islamic Finance at RAM Ratings, said that other Gulf Cooperation Council nations are expected to include sukuk issuance as a debt management strategy. On the domestic front, outstanding Malaysian sukuk expanded 11.5%,year-on-year, to RM691.4bil, as at end-March 2017, from RM620.1bil recorded in the same period last year.

#Saudi Electricity in talks with banks for dollar #sukuk issue - sources

State-controlled utility Saudi Electricity is in talks with regional and international banks about issuing a US dollar-denominated sukuk. A number of companies in the kingdom are considering sukuk issuance to offset a decline in revenues due to lower oil prices. Oil giant Saudi Aramco issued a debut $3 billion-equivalent sukuk in the Saudi local market in April, while ACWA Power is expected to issue an international bond of at least $600 million this week. Saudi Electricity issued $2.5 billion in sukuk in 2014, split between a $1.5 billion sukuk maturing in 2024 and $1 billion due in 2044. The company recently repaid a $500 million five-year sukuk it issued in 2012.

Boeing Looks to Islamic Finance and #Sukuk for Funding

Boeing Capital is exploring opportunities for Islamic finance in the aviation sector and the possibility of including aircraft finance in the Islamic sukuk market. This way, an aircraft finance portfolio would be secured by an instrument known as the Enhanced Equipment Trust Certificate. Since 2006, Boeing Capital has hosted annual airline planning seminars for financiers in the Middle East. Emirates Airlines has issued sukuk most recently in 2015 compromising of a 10 year sukuk for the value of $913 million. Guaranteed by the UK Government, the sukuk was priced on 25 March at 2.471%. Emirates also issued in 2013 a $1 billion sukuk 10 year sukuk which was priced at 3.875%. Ethihad Airlines issued a sukuk in November 2016 for $1.5 billion which was priced at 3.86%.

Introducing #sukuk bonds in #Malta

Discussion about sukuk bonds is on the increase. The government of Malta has also considered issuing this type of security. Meanwhile, many established players on the international capital markets are issuing sukuks. A sukuk has a secondary market in the same way as a typical bond has and investors may buy, hold or sell the sukuk after this has been issued in the primary market. Hence, liquidity considerations are also relevant for sukuk bonds. The buyer of a sukuk bond is indirectly buying an asset that has value rather than entering into a loan obligation with the issuer of a typical debt instrument. Importantly, the number of investors in the Islamic world cannot be ignored and therefore Sharia compliant vehicles capable of attracting their wealth are increasingly relevant. The sukuk is a good starting point for issuers to tap into this reality.

Workshop on #Sukuk Model Law project held

The Islamic Research and Training Institute (IRTI) and the Islamic Development Bank (IDB) organized a regional consultation workshop on Sukuk Model Law project. The workshop was organized in partnership with the Monetary Authority of Brunei Darussalam and was held in Brunei capital. Participants included senior officials of financial authorities from the IDB member countries in the ASEAN region, namely Brunei, Indonesia, Malaysia, Bangladesh and Maldives, as well as from Hong Kong, South Korea, Singapore, Philippines, Sri Lanka and Cambodia. The project aims to create a model Sukuk law and guidelines that allow IDB member countries and other jurisdictions a basis for a legal framework for Sukuk issuance and regulation. This was the second of four regional consultations on the Sukuk law. The first consultation was held in Senegal, Africa, and other two are planned for Europe/Central Asia and the MENA regions.

RHB Islamic Bank issues RM250mil #sukuk

#Malaysian RHB Islamic Bank has issued RM250mil subordinated sukuk murabahah, the bank's first bond issuance in about three years. Parent company RHB Bank said the sukuk would mature in 10 years and could only be redeemed from the sixth year onwards. It has a fixed profit rate of 4.88% per annum, payable semi-annually in arrears throughout the entire tenure. RHB said proceeds raised from the sukuk issuance would be used for RHB Islamic’s syariah compliant working capital. In 2016, RHB Islamic turned in a profit after tax of RM324.8mil, a 27.4% increase against RM254.8mil in the preceding year.

#Malaysia's Public Sector Home Financing Board issues RM3.25b #sukuk

Malaysia's Public Sector Home Financing Board issued up to RM3.25 billion sukuk to finance housing loans to the public sector employees. The board is also known as Lembaga Pembiayaan Perumahan Sektor Awam (LPPSA). The LPPSA said the RM3.25 billion sukuk notes formed a part of its RM25 billion Islamic commercial papers programme, which is guaranteed by the Malaysian Government. The sukuk was issued in tranches of five-year to 30-year and was priced at 4.17% to 5.225% per annum across tenures. Lead managers include Affin Hwang Investment Bank, AmInvestment Bank, Bank Islam Malaysia, CIMB Investment Bank, Maybank Investment Bank, OCBC Bank and RHB Investment Bank. CIMB is also the facility agent while RHB Islamic is the Shariah adviser.

London Stock Exchange Welcomes Islamic Development Bank #Sukuk Bond – Largest Issuance By A Supranational In

London Stock Exchange welcomes the largest Sukuk issued by a supranational globally in 2017, raising $1.25bn. The isssuance is listed by the Saudi Arabia based Islamic Development Bank and is a five-year bond with a 2.393 % yield. This listing adds to the broad range of Islamic finance products available to investors on London Stock Exchange. According to Nikhil Rathi, CEO of the London Stock Exchange, the listing demonstrates London’s standing as the world’s most international financial centre and confirms the UK as the key destination for Shariah-compliant financial products. The CFO of Islamic Development Bank, Dr. Ahmet Tiktik, said choosing London as the location for the new $1.25bn Sukuk shows the bank's continuous support for London Stock Exchange.

Bids for record-breaking #Saudi debut #sukuk cross $33bln

Saudi Arabia saw bids of $33 billion (Dh121.11 billion) for its record-breaking debut sukuk issue. The issue size of the sukuk could likely be $8 billion, spread across $4 billion each for the 5 year and 10 year tranche. The sukuk was priced at 100 basis points over mid-swaps for the 5-year tranche, and 145 basis points over mid-swaps for the longer dated issue. Anita Yadav, Senior Director of Global markets and treasury at Emirates NBD, said the yield on Saudi sukuk is likely to be attractive on relative value basis, which would appeal to the yield hungry international investor. Analysts expect larger institutions like Aramco or SABIC to take advantage and come the market. On an yearly basis, Emirates NBD expects $20 billion worth of issuance from Saudi Arabia including issues from the government, and state-run enterprises, banks and corporates.

Syndicate content