Opportune time for borrowers to issue Sukuk, says BLME

Following on from S&Ps comments regarding strong demand for Sukuk and low yields; credit spreads have been tightening in the Sukuk space for quite some time, due to supply outstripping demand and strong fundamentals in the Middle East. In addition, with the recent geopolitical tensions in Ukraine and other emerging markets, a flight to credit quality has led to further tightening. The news of Dubai rolling over its debt owed to Abu Dhabi and the UAE Central Bank for 5yrs at 1% has lowered yields further. With yields at such low levels it seems an opportune time for borrowers to issue Sukuk, even for existing conventional issuers.