United Arab Emirates

Gulf Issuers Try Out New Bond Formats

Gulf bond issuers are tapping new bond structures and investors as the energy-rich region embarks on big infrastructure projects, bolsters ties with Asia, and capitalizes on investor appetite for its highly rated paper. With global interest rates low, bond buyers around the world are hunting for higher yields and are buying Gulf bonds. They are attracted by the region’s mostly high-rated sovereign credits and yields that are often higher than other similar-rated issues in other jurisdictions. They are being paid a premium for perceived geopolitical risk in the Gulf. Total Gulf bond issuance in 2012 rose to $42 billion from $25 billion a year earlier, including sukuk. Sukuk sales in 2012 nearly quadrupled to $21.3 billion.

Cautious approval for Dubai sukuk ambition

Some analysts see the ambition of overtaking London as the world capital of the sukuk business, as a challenge for Dubai's initiative to become the capital of the global Islamic economy. Mohieddine Kronfol, the chief investment officer for global sukuk and fixed income business for Franklin Templeton, thinks Dubai can establish itself in a leadership position in the long-term. Kronfol believes Dubai and the region need to be more mature in their overall approach to finance if they are to lead the Islamic economy. He cites the lack of a pension fund industry, the relative immaturity of the insurance and asset management businesses as examples of lack of financial depth.

Linklaters brings ex-Norton Rose Islamic finance star on board

Linklaters has hired KPMG global Islamic finance head Neil Miller as its new global Islamic finance head, based in Dubai. Miller joins the magic circle firm from accountancy firm KPMG. He joined KPMG two years ago from Norton Rose, having developed a leading Islamic finance practice at the firm over around 20 years. Norton Rose moved Miller out to Dubai from London in 2009 in a bid to strengthen its Middle East practice. He previously headed Norton Rose’s Bahrain office from 1997 to 2000.

DMCC Tradeflow launches electronic Commodity Murabaha trading platform

Dubai Multi Commodities Centre (DMCC) has announced the inaugural Commodity Murabaha transaction on its DMCC Tradeflow platform. The transaction took place between Noor Islamic Bank and Commercial Bank of Dubai, marking the official launch of the DMCC Tradeflow Islamic product portfolio. According to Ahmed Bin Sulayem, Executive Chairman, DMCC, the DMCC Tradeflow pioneered the use of an electronic central registry of commodity ownership in Dubai. The commodities available on DMCC Tradeflow include oil products, foodstuffs and base metals and if required these goods can be inspected easily by Shari’ah scholars.

ADIB provides Dhs600m financing facility to Manazel Real Estate

Abu Dhabi Islamic Bank (ADIB) is providing Dhs600m financing facility to Manazel Real Estate to fund the Abu Dhabi-based company's financial obligations and capital expenditure. The financing agreement was signed by Mr. Mohamed M. Al Qubaisi, Chairman of Manazel Real Estate PJSC and Mr. Arif Usmani, Global Head of Wholesale Banking in ADIB. Manazel Real Estate PJSC, a real estate developer in Abu Dhabi, recognizes and appreciates ADIB's support to real estate developers in Abu Dhabi along with other sectors and local businesses, which contributes to the growth and development of Abu Dhabi.

Al Hilal Bank supports Earth Hour and Abu Dhabi Vision 2030

In keeping with its slogan of 'the orange bank that thinks green,' Al Hilal Bank, a progressive Islamic bank, has pledged to switch off the lights in all of its branches and offices starting at 9 pm on March 23, 2013 in celebration of 'Earth Hour.' Al Hilal Bank will use the event as a platform to reaffirm its sustainability commitments and show its support for the environmental goals included in the Abu Dhabi Vision 2030 development plan. The bank has engaged in various initiatives championing the environment under its 'Go Green' strategy.

Noor Awqaf launches relief aid project

Noor Awqaf, the joint venture between Noor Investment Group and the Awqaf and Minors Affairs Foundation (AMAF), have launched a humanitarian project that will give aid agencies around the world access to relief aid Halal meat at times of natural disasters and famine. In conjunction with Awqaf New Zealand, Noor Awqaf has forged links with New Zealand’s meat producers and processors to secure a robust supply chain of quality Halal meat for distribution by aid agencies at times of natural disasters or civil emergencies. The meat will be supplied to aid agencies in sealed pouches to ensure its edibility for two years.

Centralised legal framework for Islamic economy soon

By the end of this year, the Islamic Economy Higher Committee will come out with a unified Islamic legislation to help encourage and support Islamic products in the emirate. The committee will also work on creating bodies or committees authorised to certify and check on the Islamic products. However this will be left optional, the Committee’s member and Director General of Dubai Department of Economic Development, Sami Al Qamzi said.

ICD launches $2b syndication

Investment Corporation of Dubai (ICD) has launched the syndication of its new $2 billion conventional and Islamic financing facilities. The purpose of the facilities is to refinance the $2 billion five year tranche of the original $6 billion three and five year facilities signed on August 21, 2008. The new facilities will have a tenor of five years. The $4 billion tranche which was due in August 2011 was repaid in full. ICD will be hosting a bank meeting in Dubai during the week commencing March 24, 2013.

Strong sukuk issuance and performance is anticipated this year

Strong investor demand supported by improving liquidity is expected to boost both issuance and performance of sukuk this year. Global issuance expanded for the fourth year in a row in 2012, growing 64 per cent to about $138 billion. While sukuk is still considered an alternative investment, it is believed to have the potential to grow, especially due to funding needs and large infrastructure investments in Malaysia and the GCC.

Abu Dhabi's Al Hilal Bank seeks rating, to issue sukuk in Q3

Al Hilal Bank plans to issue a debut Islamic bond worth $500 million in the third quarter of this year, according to its chief executive Mohamed Berro. The bank aims to fund growth, diversify its balance sheet, and benchmark the bank in on the debt market. Al Hilal Bank mandated National Bank of Abu Dhabi, HSBC and Standard Chartered Bank for the issue. Furthermore, the bank expects to obtain a credit rating in the coming two or three months.

Dubai Islamic Bank prices $1bn 6.250% Tier 1 Capital issuance

Dubai Islamic Bank announced the successful pricing of a $1bn Tier 1 Capital-eligible issuance, with a perpetual (non-call 6) maturity. The issuance carries a profit rate of 6.25%, which represents the best yield ever achieved by a GCC bank on public Tier 1 transaction. The transaction was allocated to investors across the Middle East (38%), Asia (29%), Europe (29%) and US Offshore (4%). In addition, the types of accounts were also well balanced, with Banks (33%), Private Banks (32%), Fund Managers (29%), Hedge Funds (5%) and Other (1%) investors anchoring the orderbook. Dubai Islamic Bank, Emirates NBD Capital, HSBC, National Bank of Abu Dhabi and Standard Chartered Bank acted as Joint Lead Managers on the offering.

BIMB-Dubai Financial Group talks may have stalled

Talks between BIMB Holdings and the Dubai Financial Group (DFG) over the latter's 30.5% stake in Bank Islam Malaysia have stalled. This is because a long-awaited plan by BIMB to transfer its listing status to Bank Islam is nearing fruition, a prospect DFG finds more attractive than hiving off its interest to pare down debts. The bigger picture, however, is that pilgrim fund Lembaga Tabung Haji, the parent to both BIMB and Bank Islam, is revisiting the idea of a mega Islamic bank involving a merger between BIMB and Bank Muamalat Malaysia. Bank Islam managing director Datuk Seri Zukri Samat said the lender might carry out an initial public offering (IPO) within a year or two.

Dubai Islamic Bank to issue sukuk on Wednesday; orders top USD10bn

Dubai Islamic Bank is likely to issue a benchmark-sized Islamic bond on Wednesday after receiving orders in excess of $10 billion. Dubai Islamic Bank perpetual sukuk may yield 7% annually.

DEWA sukuk lists for $1 billion

Dubai Electricity and Water Authority (DEWA) has listed its planned $1 billion sukuk on Nasdaq Dubai. The sukuk has raised more than expected, with WAM claiming regional and global investors had reacted positively, leading to an increase in the value of sukuk listed on Nasdaq to $6.24 billion, while the value of sukuk listed in Dubai bourses rose to $10.173 billion. The state utility, rated BBB, had sought a profit of about 3 percent. The proceeds from the five-year deal will be used to refinance existing maturities as well as for new projects. Standard Chartered, Citigroup, RBS and local lenders Emirates NBD, Dubai Islamic Bank and Abu Dhabi Islamic Bank are mandated joint book runners on the deal.

Dubai's Nakheel announces new USD32.66m sukuk issuance

Dubai's Nakheel announced that it issued a USD32.66 million sukuk as part of its restructuring plan. This is the property developer's fourth issuance which brings the total amount issued by the firm to USD1.16 billion. Since November 2009, Nakheel has paid nearly USD2.72 billion to different trade creditors and contractors. Nakheel's first tranche was issued in August 2011, and in January, the company issued a sukuk worth USD32.93 million. Nakheel is going through a USD16 billion restructuring plan.

ADIB Finances DAFZA's Expansion with AED 500million

Abu Dhabi Islamic Bank (ADIB) has signed an agreement to provide financing facilities for AED 500 million to Dubai Airport Freezone (DAFZA). The financing will be used to expand DAFZA's key offices buildings, business centre and food court which are due to be completed in 2015. The agreement was signed at DAFZA's headquarters by Dr. Mohammed Al Zarooni, Director General of DAFZA and Tirad- Al Mahmoud, CEO of ADIB. The project is in line with HH Sheikh Mohammed Bin Rashed Al Maktoum's initiative to make Dubai the Global Capital of Islamic economy.

Dubai Group's $10bln debt plan to include more oversight for creditors

Dubai Group's $10 billion debt restructuring will be managed by David Smoot, chief executive officer of Dubai International Capital (DIC). In addition to Smoot's appointment, two banks will be named to a post-restructuring creditor committee to provide oversight of Dubai Group's business to ensure the interests of creditors are protected for the duration of the debt deal. In order to succeed the group is yet to divest some of its larger assets.

Falcon Private Bank to launch fund to invest in sukuk

Falcon Private Bank is planning to launch a fund early next month that will invest in global sukuk.The fund will be offered to the bank’s clients and could grow to $500 million, according to Zafar Khan, Falcon’s Mena chief executive. There is alreade substantial demand from the bank's clients for global sukuk investments, he added. He also considers the yields of the past two years dislocated and the current yields more realistic to the underlying risk.

HSBC Among Banks Said to Agree $4 Billion Al Jaber Debt Deal

Abu Dhabi-based Al Jaber Group eached a deal with its five main lenders to restructure about $4 billion of debt. The company agreed on terms, including loan repayments over five years. The debt, which includes both conventional and Islamic facilities, will pay annual interest of between 300 basis points, or 3 percentage points, to 400 basis points over the London Interbank Offered Rate. The deal will result in no loan losses. National Bank of Abu Dhabi PJSC, Abu Dhabi Commercial Bank PJSC (ADCB), Royal Bank of Scotland Group Plc and Union National Bank PJSC make up the coordinating committee with HSBC negotiating the new terms on behalf of about 30 lenders.

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