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The investment management firm Lotus Capital Limited has been honoured as the best in Africa by the Islamic Finance News (IFN). Lotus Capital won the Africa Deal of the Year Award as the lead issuing house for the N11.4 billion Osun state sukuk issue, which was listed on the Nigerian Stock Exchange (NSE) in September 2013. The issue was oversubscribed by about 20 per cent. The Osun state government, represented by the Honourable Commissioner of Finance, and the Solicitors to the Issue, Kola Awodein and Co, were also award recipients for the deal. Besides, Lotus also developed the country's first Islamic Index on the NSE, known as the “NSE Lotus Islamic Index” or NSE LII. The Index recorded +44.21 per cent in 2012 and +61.84 per cent in 2013.

Like all financial services, Islamic finance needs an appropriate supervisory framework and legislation is often the first step towards opening a new market. Financial institutions also need to ensure they have sufficient shariah expertise and advice to develop appropriate products. Three factors are driving the market’s growth. First, it is becoming part of normal retail and corporate banking in core Islamic countries, such as Saudi Arabia. Second, its growth appeals to other markets, particularly in the Muslim world. The third driver is innovation. In the end, greater availability of sukuk offers more choice to companies and investors and allows issuers to offer products tailored to specific needs.

AMMB Holdings has announced that its Islamic banking arm, AmIslamic Bank has on 28 February 2014 successfully issued its inaugural issuance of RM200.0 million Basel III-compliant Tier 2 Subordinated Sukuk Murabahah. The issuance is also Malaysia's first Basel III-compliant Tier 2 Subordinated Sukuk issuance and the world's first Basel III-compliant Tier 2 Subordinated Sukuk to be issued under the Shariah principle of Murabahah based on commodity trading (via a Tawarruq arrangement).

The Islamic Development Bank has launched a $1.5 billion, five-year sukuk issue which will price shortly. The transaction, the AAA-rated lender's first in 2014, will price at a spread of 23 basis points over midswaps. Pricing is inside the guidance given by lead managers on Tuesday, which indicated that a benchmark-sized sukuk would price in the mid-to-high 20s over the same benchmark. Benchmark-sized is traditionally understood to mean in excess of $500 million. The banks arranging the transaction are CIMB, Commerzbank, First Gulf Bank, HSBC, Natixis, National Bank of Abu Dhabi and Standard Chartered.

The Islamic Development Bank aims to issue its first short-term sukuk this year, and is studying how it might start to guarantee Islamic bond issuance by member countries. A lack of short-term paper has been a significant constraint on the development of Islamic finance globally. The Malaysia-based International Islamic Liquidity Management Corp began trying to fill that gap last year with issues of three-month sukuk; it now has $1.35 billion outstanding. The IDB hopes to join the IILM in issuing short-term instruments this year. They could come in the form of 30-, 90-, 180- or 360-day sharia-compliant securities. The IDB is also looking to do longer tenors, however, the wider market isn't ready for longer-term Islamic bonds yet.

The National Commercial Bank (NCB) has successfully placed its 5 billion Saudi riyal (Dh4.89 billion) 5-year subordinated Tier II capital sukuk offering. Great interest from the investor community generated a 2.1x oversubscribed orderbook exceeding the initial target issuance size of 4 billion riyals, allowing the transaction to be upsized to 5 billion riyals without impacting the final pricing of the sukuk. NCB’s issuance was priced at 6-month SIBOR+110bps. HSBC Saudi Arabia acted as a lead coordinator and GIB Capital, HSBC Saudi Arabia, JP Morgan Saudi Arabia and NCB Capital acted as joint lead managers and joint bookrunners. The issuance proceeds will be used to further support NCB’s growth plans across the various business segments of the bank.

The sharia compliant arm of Malaysia-based Public Bank has submitted a proposal to the central bank for a 5 billion ringgit ($1.5 billion) Basel-III compliant Islamic bond program. Public Islamic Bank, a wholly-owned unit of Public Bank, may emerge as the third issuer of Basel III compliant sukuk. AmIslamic, which established a Basel III compliant sukuk program for 3 billion ringgit on Feb 13, sold 200 million ringgit on Wednesday. RHB Capital received approval from the securities commission for a similar 1 billion ringgit program earlier this month. Besides, the country's conventional banks have begun issuing Basel III bonds; Public Bank issued medium-term notes worth 1 billion Malaysian ringgit last September.

Islamic Development Bank is aiming to price a benchmark-sized Islamic bond issue on Thursday after releasing initial price guidance for a five-year deal. The supranational lender set initial guidance at mid-to-high 20s over midswaps. While no definitive size has been set for the issue, the first from the AAA-rated bank since May, it was expected to be benchmark-sized – which is traditionally understood to mean in excess of $500 million. The banks arranging the transaction are CIMB, Commerzbank, First Gulf Bank, HSBC, Natixis, National Bank of Abu Dhabi and Standard Chartered.

The Director of the Islamic Banking Department of the State Bank of Pakistan (SBP), Saleem Ullah, has said that the mechanism for short-term liquidity instruments for Islamic banks is being evolved and the launch of these bonds is expected in the next six months. Currently, Islamic banks can only invest in three-year government ijara sukuk. Earlier, experts on Islamic banking and finance agreed the Islamic banks can invest in government activities and projects much like conventional banks but there is a need to create an underlying asset. Another expert said that while the industry has been partially successful in eliminating riba from banking transactions, it needs to introduce diversified products for those segments of the society, which want Islamic investment and financing.

Export-Import Bank Malaysia (Exim Bank) has established a RM3.3 billion (US$1 billion) Multicurrency Sukuk Issuance Programme under the special purpose vehicle, Export- Import Sukuk Malaysia. On Feb 19, 2014, the first sukuk series from the programme was issued. A hybrid structure was decided upon on the basis of wakala principle. The Exim Bank sukuk received strong investor demand. It was oversubscribed by approximately 10 times attracting approximately US$3.2 billion orders. The strong demand from the investors allowed the sukuk to be priced at the tighter end of final price guidance at T+140 bps following an initial price guidance of T+165 bps area, which is equivalent to an all-in yield of 2.87% per annum.

The National Commercial Bank (NCB) has successfully placed its SR5 billion 10 non-call 5-year subordinated Tier II capital sukuk offering. The transaction represents NCB's debut of local riyal issuance and its inaugural Tier II capital offering. Interest from the investor community generated a 2.1x oversubscribed orderbook exceeding the initial target issuance size of SR4 billion, allowing the transaction to be upsized to SR5 billion without impacting the final pricing of the sukuk. NCB's issuance was priced at 6-month SIBOR+110bps. The issuance proceeds will be used to further support NCB's growth plans across the various business segments of the bank.

Fitch Ratings has assigned Export Import Bank of Malaysia's (MEXIM) USD300m 2.874% sukuk due 2019 a final rating of 'A-'. The Islamic bonds are issued under MEXIM's USD1bn multi-currency sukuk programme established through EXIM Sukuk Malaysia. The sukuk rating is the same as MEXIM's Long-Term Issuer Default Rating (IDR). EXIM Sukuk Malaysia, a special purpose vehicle (SPV) incorporated solely to facilitate sukuk issues, will use the sukuk proceeds to purchase eligible assets from MEXIM. However, any deterioration in the Malaysian sovereign's creditworthiness and ratings or in the government's propensity to support MEXIM would hurt the IDR and hence the sukuk rating.

AmIslamic Bank, subsidiary of AMMB Holdings, has received the necessary approvals from both Bank Negara Malaysia and the Securities Commission of Malaysia to set up a subordinated Sukuk Murabahah programme with a value of RM3bn. The subordinated Sukuk Murabahah programme has a tenor of up to 30 years from the date of issue and each tranche will have a tenor of five years minimum. In a market filing the issuer said that RAM Rating Services had assigned a preliminary long-term rating of 'AA3' to the Subordinated Sukuk Murabahah under the programme.

The Malaysia-based International Islamic Liquidity Management Corp (IILM) will issue a $490 million three-month Islamic bond next week, after expanding its issuance programme to $1.35 billion in January. The auction of the three-month sukuk, rated A-1 by Standard and Poor's, will be conducted on Feb. 25. Last month, the IILM sold $860 million worth of three-month paper, designed to meet a shortage of highly liquid, investment-grade financial instruments for the short-term funding needs of Islamic banks. Since the programme's launch, primary dealers have held on to the IILM instruments after auction and there has been little if any secondary market trade in them.

The Turkish Treasury said on Monday it will issue a lira-denominated Islamic bond, or sukuk, on Feb 19. In order to diversify the borrowing instruments, broaden the investor base and increase the domestic savings, Turkish lira-denominated Lease Certificates will be issued. The Treasury previously said it would issue a sukuk worth 1.5 billion lira in February.
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DIFC-based investment bank Alpen Capital has advised Dubai Investment Park Development Company LLC (DIPDC) on its $300 million debut Sukuk offering. Alpen Capital also advised DIPDC on its Ratings ahead of the Sukuk offering. The landmark transaction is structured as a Wakala Sukuk and issued through a special purpose vehicle (DIP Sukuk Limited). The issue was oversubscribed 13 times. DIPDC was able to price the Sukuk with a yield of 4.291 per cent (equivalent to a spread of 265bps over five-year USD Mid-Swaps) on the back of an order book that peaked at over $4 billion. Al Hilal Bank, Citigroup, Dubai Islamic Bank PJSC and Emirates NBD Capital acted as Joint Lead Managers and Joint Bookrunners.

Islamic Development Bank (IDB) has picked seven banks to arrange meetings with fixed income investors ahead of a potential sukuk issue. The banks are CIMB, Commerzbank, First Gulf Bank, HSBC, Natixis, National Bank of Abu Dhabi and Standard Chartered. IDB will hold roadshows in the Middle East and Asia commencing February 23, with a dollar-denominated Islamic bond to follow subject to market conditions. The AAA-rated bank last sold a sukuk in May, when it priced a $1 billion five-year Islamic bond with a profit rate of 1.535 per cent.

Luxembourg's parliament could pass a bill as soon as two months from now to facilitate its first issue of sovereign sukuk, though an upcoming budget vote may delay approval for five months. Last month, the Luxembourg government presented a bill to parliament to allow the securitisation of assets for a proposed sukuk worth 200 million euros ($275 million), part of efforts to boost the tiny state's Islamic finance credentials. Lawmakers are now studying the bill's conformity to existing laws, while the actual structure and issuance of the sukuk depends on the finance ministry. Legal filings show Luxembourg's sukuk would be denominated in euros and listed on an exchange, but such details are not final.

AmIslamic Bank has obtained approval from the Securities Commission Malaysia to establish a subordinated sukuk murabaha programme of up to 3 billion ringgit (US$903.60 million), which would represent the first Basel III-compliant sukuk in Malaysia. AmIslamic is given the flexibility to issue subordinated sukuk murabaha during the availability period of the programme based on the bank's funding requirements. The AmIslamic programme has a tenor of up to 30 years from the date of the first issuance of the subordinated sukuk murabaha. Each tranche to be issued shall have a tenor of at least three years, subject to their maturing on or before the expiry of the programme. AmIslamic's sukuk murabaha is rated AA3 by RAM.

National Commercial Bank has mandated its own banking arm, NCB Capital, as well as that of Gulf International Bank and the Saudi Arabian units of HSBC and JP Morgan to arrange a local currency sukuk. The sukuk will enhance the bank's Tier 2 - or supplementary - capital and will have a ten-year lifespan with an option of the bank redeeming the instrument after five years. The size of the issue has yet to be determined. NCB's chairman was quoted in October as saying the bank was planning to issue a capital-boosting sukuk worth up to 4 billion riyals ($1.07 billion).