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The second tranche of Malaysia Airlines' (MAS) junior Sukuk of RM500mil has been issued. Its role is to provide working capital and refinancing of existing borrowings. According to MAS, the junior Sukuk has a semi-annual profit rate of 6.90% a year up to the tenth year.

More on: http://biz.thestar.com.my/news/story.asp?file=/2012/9/18/business/201209...

The market in the US and Europe is galvanized by central bank operations. Meanwhile, yield-starved Islamic investors grow more and more selective. High interest for emerging market bonds resulted in erosion of the advantage in price that sukuk enjoyed until recently. It is possible that issuers will not be able to save as much as 40bp with suku any longer. At the same time, according to S&P, borrowers have raised USD19.2bn so far in 2012.

More on: http://in.reuters.com/article/2012/09/17/idINL5E8KHMON20120917

After bein inactive on the suku market for 2 years, Qatar Islamic bank (QIB) is about to launch a new sukuk program. The bank's board has approved a sum of $1.5 billion for this purpose. According to a spokesman of the bank, the issuance will be managed by HSBC Holdings PLC, Standard Chartered PLC, QInvest LLC and Deutsche Bank AG. The issuance will take place in two tranches of of $750 million. The first one will probably be issued in a month's time.

More on: http://me-confidential.com/5664-qatar-another-sukuk-program.html

Baker & McKenzie assisted Saudi Binladin Group with a SAR 1,000,000,000 short term sukuk al murabaha. The sukuk was issued by SBG Sukuk Limited as an exempt offering in Saudi Arabia. The sole Lead Manager in relation to the transaction is HSBC Saudi Arabia.

More on: http://www.zawya.com/story/Baker__McKenzie_act_for_Saudi_Binladin_Group_...

Recently a number of GCC companies issued landmark corporate and infrastructure sukuk in Malaysian ringgit. According to a report by Standard & Poor’s Ratings Services, this might be a sign of a starting trend of development and globalization of the market. Islamic financial instruments are becoming more popular since conventional banks worldwide offer fewer and shorter loans. Especially for countries of GCC and Asia, Islamic financial instruments will very probably become a key funding source.

More on: http://gulfnews.com/business/banking/gcc-and-asia-likely-to-use-sukuk-fu...

Today Bloomberg announced the launch of a new corporate sukuk index - Malaysian Ringgit (MYR). The index has been developed together with the Association of Islamic Banking Institutions Malaysia (AIBIM) and Bursa Malaysia. The purpose of the Bloomberg AIBIM Bursa Malaysia Corporate Sukuk Index is to serve as a benchmark for investors of ringgit-denominated Islamic bonds in Malaysia. It will track and measure the performance of the most liquid and credit-worthy Islamic corporate bonds in the country.

More on: http://www.moneylife.in/business-wire-news/bloomberg-launches-new-corpor...

According ot a report by Standard & Poor's Ratings Services, a trend to develop and globalize the sukuk market is being set. Since conventional banks worldwide tend to producing fewer and shorter loans, companies look for an alternative in terms of financing. In this case, it is very probable that Islamic financial instruments become a significant source of funding, particularly in the GCC and Asia. While these regions mark the center of a huge estimated $1 trillion market, they also need high capital for developing their infrastructure.

Qatar’s $4bn sukuk issue marks great success and is referred to as a milestone in the rise of Qatar’s sharia-compliant finance industry. The growth of Islamic financial services are supported by ambitious infrastructure investment programme and a growing wealth by capita. The sukuk was oversubscribed over six times which results in an order book of more than $24bn. During hte time of international economic uncertainty Qatar manages to show some stability. As a result, low yields of 2.09% and 3.24% of the five-year and ten-year bond of the two-tranche sukuk respectively are observed which is a sign of strong demand for Qatar’s sukuk.

As part of its Sukuk programme, Axiata Group has priced its maiden two year Chinese yuan renminbi (CNY) denominated Sukuk. The whole multi-currency Sukuk programme is planned to be worth about $1.5bn. On Tueday Axiata priced the first part of the Sukuk. It is expexted that the issue will be listed Bursa Malaysia Securities and on the Singapore Exchange. Among the banks which worked on the issue are CIMB Investment Bank, HSBC and Merrill Lynch Singapore.

A few days ago, the Board of Directors of Saudi Hollandi Bank has made a decision to issue Sukuk worth SR 1,400 million. The issuance is a private offering aiming to support its capital base by using a Shariah compliant structure. The latter is to be approved by the competent authorities.

After the initial announcement that the Turkish Treasury has mandated Citigroup, HSBC and Liquidity Management House (LMH) to inspect existing opportunities for a Lease Certificate issuance, it turns out that the mandate aim to advise and structure Turkey's proposed debut sovereign Sukuk Al-Ijara. In this context, a number of investor meetings in significant financial centers in the Middle East and Asia are organized and will take place until Thursday.

According to a statement by the Undersecretariat of the Treasury in Turkey, Citigroup, HSBC and Liquidity House have been mandated to investigate opportunities concerning the issuance of a Lease Certificate in the international capital markets. For this purpose numerous road shows for the Sukuk are planned and will be held in financial centres across the Middle East and Asia. The show will take place in the period 10-13 September. The Sukuk is supposed to be dollar-denominated and issued in the week of 17 September.

The senior notes under HSBC Amanah Malaysia's proposed Multi-Currency Sukuk Programme of up to MYR 3 billion have received a long-term rating of AAA by RAM Ratings. At the same time, respective long- and short-term financial institution ratings of the bank have been reaffirmed at AAA and P1. The outlook for both long-term ratings in terms of stability looks positive.

After almost a decade of preparation works, Turkey makes the next step in its Islamic bond plan. Citigroup, HSBC and Liquidity House of Kuwait are mandated to examine opportunities for sukuk issuance. The expectations are that the government will be able to gain a profit of up to $1bn through the sukuk. Also, the sukuk is likely to bridge the funding gap in the country's budget deficit target of 1.5 per cent of gross domestic product for 2012.

Due to economic chaos in Sudan, foreign investors cannot easily receive their bond payments. There is no legal possibility to directly convert bond payments into dollars. Therefore, it is recommended to reinvest, e.g. in real estate, using the money paid out in local currency. The main reason for impossibility of payment in dollars is the independence of South Sudan in July 2011. Since South Sudan was the country's main source for oil as well as for dollars, now it finds itself cut off. The central bank hardly allows conversion of shares or bonds into dollars in order to preserve money for food imports.

Nine months ago Al Baraka Banking Group cancelled the debut sales of sukuk due to very high yields. Now that the situation has turned and Al Baraka Turk Katilim Bankasi again considers its previous intentions. It plans to offer $250 million (Dh917 million) of seven-year dollar-denominated sukuks this year.

Sukuk continues to attract interest among investors. Until now, $17.4bn have been raised in the form of 45 issues. This may look little compared with conventional credit markets. However, in Islamic banking, it is the highest issuance in the first half of the year since 2008. The sukuk wave is expected to become even bigger. Causes therefore are that the majority of sukuk investors are Islamic investors as well as that liquidity in the Middle East is driven by oil prices to a high extent. The situation is different in Malaysia, since the country is not an oil producer. The solution there is shaping the supply side to boost the market by regulation.

A company statement on Wednesday said Qatar Islamic Bank is planning a sukuk issuance programme of up to $1.5 billion. The bank will seek the approval of shareholders of the plan in a meeting on September 16.

Syarikat Prasarana Negara Bhd is paying 20 per cent less to finance railway expansion than China, as sliding sukuk costs mean. In an interview yesterday the company’s finance director Mohd. Zahir Zahur Hussain said Prasarana RM1 billion each of 2022 and 2027 Syariah-compliant notes to yield 3.77 per cent and 4 per cent, respectively. The government’s debt clearing house website shows China’s Ministry of Railways issued 10-year non-Islamic bonds at a coupon rate of 4.68 per cent on Aug 21 and 15-year securities at 5 per cent.

Celcom Axiata Bhd has reached a price of RM5bil in nominal value for its sukuk issuance. Via bookbuilding process, RM3bil of it received a final book of RM10bil. There is a strong demand for the RM3bil sukuk from asset management companies, financial institutions, insurance companies and corporate organisations. The remaining sum of RM2bil is privately allocated. According to Celcom, the RM5bil sukuk was the largest rated sukuk murabahah issuance based on a tawarruq arrangement in the Malaysian debt capital market to date.