IslamicFinance.de

Goldman Sachs is preparing to issue benchmark-sized, U.S. dollar-denominated sukuk with a wakala structure after announcing plans to meet fixed income investors, according to leads. The investment bank plans to issue the sukuk through the JANY Sukuk Co vehicle after meeting investors in the Middle East on Sept. 10 and 11, a document from lead managers said. Goldman Sachs picked itself, Abu Dhabi Islamic Bank, Emirates NBD, National Bank of Abu Dhabi and NCB Capital to arrange the investor meetings.

The World Bank plans to raise as much as $500 million worth of sukuk this year to help fund an immunisation programme, one of several initiatives from the multilateral body in the Islamic finance sector. The World Bank, acting as treasurer of the International Finance Facility for Immunisation (IFFIm), would help issue the sukuk. The World Bank has hired Standard Chartered and National Bank of Abu Dhabi to arrange the transaction, which could happen as early as this month although a specific timeframe has yet to be finalised. The size is expected to be between $300 million to $500 million, depending on market conditions. Since 2006, IFFIm has raised $4.5 billion through bonds, its last issuance was a $700 million bond in June of last year.

Oman is expected to issue 500 million rials ($1.3 billion) worth of conventional and Islamic sovereign debt early next year, and aims to choose the arranging banks in October. Last month, the finance ministry received applications from banks to arrange the issuance, with plans to raise 300 million rials via conventional bonds and 200 million rials with sukuk, said Jamil Al Jaroudi, chief executive of Bank Nizwa. The issuance would be in local currency and would apparently be separate from an international, U.S. dollar-denominated sovereign bond issue which Oman has said it may conduct. It is expected to be in the market in the first quarter of 2015.

CIMB Islamic said it will pursue a larger balance sheet to help win more business, regardless of whether a proposed merger with two smaller peers happens. In July, CIMB Group Holdings Bhd, RHB Capital Bhd and Malaysia Building Society Bhd secured regulatory approval to begin merger talks. The lender's chief executive Badlisyah Abdul Ghani said that scale is important in being effective in business, so whether that scale is achievable under the current proposed merger talks or something else, the bank will continue to pursue it. The lenders have until Oct. 8 to finalize the pricing, structure and other terms of the merger. Details have yet to be ironed out, but the new Islamic bank could have assets worth 122 billion ringgit ($38.3 billion).

Dubai Islamic Bank has ruled out seeking a controlling stake in Bank Panin Syariah, and its plans are limited to raising its stake in the Indonesian lender to 40 percent from 25 percent now, its chief executive Adnan Chilwan said. Dubai Islamic bought 2.42 billion shares in the listed sharia-compliant lender in June, its first foray into southeast Asia. In May, the bank said it hoped to reach 40 percent before the end of the year, using its own cash to fund the purchase. Under Indonesian rules, foreign ownership of local lenders requires regulatory approval to go above 40 percent. Last month, Indonesia's financial services authority said it was preparing a five-year industry blueprint that would address foreign ownership limits.

Kazakhstan's Al Hilal Islamic Bank may expand into neighbouring countries as legislative efforts to develop Islamic finance gather pace across the region. Legislation is being redrawn in Kazakhstan, after the first set of Islamic finance rules in 2009 failed to spur much activity. Almaty-based Al Hilal, whose parent is wholly owned by the Abu Dhabi government, is considering increasing its geographical presence as part of its 2015 business plan, chief executive Prasad Abraham said. A draft amendment, currently awaiting discussion in Kazakhstan's parliament, would provide the bank with a clearer framework that could translate into better commercial opportunities, Abraham said.

The South African government plans to raise at least $500 million in its first issue of Islamic bonds, a Treasury official indicated on Thursday. Five years is the most popular tenor for major international sukuk issues, and South African officials said last year that the country was leaning towards that tenor for its U.S. dollar-denominated sale. The government has said it was issuing a sukuk in order to diversify its fund-raising. It has hired BNP Paribas, Standard Bank, and KFH Investment, a unit of Kuwait Finance House, to handle investment meetings in Europe, Asia and the Middle East starting on Sept. 8. A sukuk issue may follow but the timing will depend on market conditions.

Hong Kong's government will hold investor meetings next week for its maiden Islamic bond issue. A meeting will be held in Hong Kong on Monday before one in Singapore on Tuesday, Kuala Lumpur on Wednesday and meetings in Dubai, Doha, Abu Dhabi and London on Thursday. The AAA-rated government earlier mandated HSBC, Standard Chartered, CIMB Group Holdings and National Bank of Abu Dhabi to arrange the issue. The sukuk ijara issue is expected to be listed on the Hong Kong, Malaysia and Dubai bourses. The sukuk is expected to be denominated in U.S. dollars and have a tenor of five years. Officials have previously said issuance size is expected to be about US$500 million to US$1 billion.

Bahrain's Gulf Finance House (GFH) said on Wednesday that it had signed to obtain a $105 million, five-year Islamic credit facility from Kuwait Finance House, which would help GFH redeem two syndicated debt facilities and allow the release of some major GFH assets. GFH, which suffered heavily in the wake of the global financial crisis and required multiple debt restructurings, said Kuwait Finance House would have an option to convert its outstanding debt into GFH shares. It did not elaborate on the terms of any equity conversion. The Bahraini firm noted that it had paid down some $30 million of current outstanding debt facilities to date in 2014, representing payment of more than 15 percent of its total liabilities.

Malaysia-based International Islamic Liquidity Management Corp (IILM) will raise $790 million through its Islamic bond programme next week, according to a filing with the central bank. The IILM, a consortium of central banks from Asia, the Middle East and Africa, will auction a three-month $390 million sukuk and a six-month $400 million sukuk on Monday Aug. 25. IILM last went to the market in July to re-issue $860 million worth of three-month papers, in order to meet a shortage of highly liquid, investment-grade financial instruments which Islamic banks can trade to manage their short-term funding needs.

Lamido Sanusi was crowned Muhammadu Sanusi II, the 14th Emir of Kano in June, taking over from Ado Abdullahi Bayero after his death. A grandson of the 11th Emir of Kano and prince in the royal family, Sanusi was Central Bank governor from 2009 to 2013, when President Goodluck Jonathan suspended him after he exposed massive corruption at the state oil firm. His first months have shown the major challenges he faces: a string of suicide bombings, carried out by women, forced him to cancel the traditional end of Ramadan celebrations called the Durbar. The Islamist Boko Haram insurgency is increasingly targeting Kano. Sanusi also faces possible civil unrest in Kano if Goodluck Jonathan, a Christian southerner seen by many northerners as divisive, wins another term in 2015 elections.

London-based Gatehouse Bank is developing new business lines and widening its investor base as the Islamic wholesale lender looks to build a more stable revenue stream. The bank remains focused on real estate in Europe and the United States but wants to expand its investor base beyond Kuwait, its traditional source of funds, while generating more deals outside the British property market. New chief executive Henry Thompson, who joined in April this year, says he wants to reduce the bank's dependence on transaction fees. This comes after fee and commission income dropped more than two-thirds during last year, partly because of lower deal activity in Britain. The bank also plans to launch an online retail deposit product in December and is considering structuring private investment funds.

Regulators in Jordan have introduced a set of long-awaited rules covering the structuring, issuance and trading of sukuk. Jordan is one of several Muslim-majority countries keen to develop their domestic Islamic finance sector and the government is studying a proposal to issue a sovereign sukuk, mirroring efforts by Egypt and Tunisia. The Kingdom has an established Islamic banking sector but sukuk have been slow to appear. Local company Al-Rajhi Cement has thus far been the only one to issue a sukuk, an 85 million dinar deal in 2011. Lawmakers passed legislation in 2012 allowing the government to issue sukuk but the sector has been held back by, among other things, legal limitations on the transfer of assets required to underpin such transactions.

Turkish Islamic lender Bank Asya said an exclusive deal with Qatar Islamic Bank (QIB) to acquire a stake in the Turkish lender was annulled, opening the way for alternative suitors. QIB and Bank Asya have reportedly ended the talks after a disagreement over price. Deputy Prime Minister Ali Babacan said on Wednesday that state-run Ziraat Bank, which is looking to launch its own Islamic banking unit, could buy Bank Asya. The bank's future looked dim after the authorities cancelled its tax collection and social security payment deals on Thursday - a sign according to observers that the government may be a step closer to winding down the lender.

EFU Life Assurance and EFU General Insurance, Pakistan's largest private insurance group, will offer sharia-compliant insurance products through takaful windows. The plans come two months after regulators cleared the way for conventional firms to offer Islamic products, part of regulatory effort to increase insurance penetration in Pakistan. Company officials declined to comment on their plans but a source at one of the units said the takaful windows could be operational in two to three months. The Securities Commission had earlier said it had received five applications for takaful windows and expected as many as half of all conventional insurers in Pakistan to eventually apply for a licence.

Islamic Development Bank (IDB) issued $1 billion in five-year Islamic bonds, or sukuk, earlier this month, the largest ever privately-placed transaction from the supranational institution. The sukuk was priced on July 17 and carried a 1.8118 percent coupon at issue, underwritten by the IDB itself. The deal follows a $100 million three-year private placement in April and a $1.5 billion five-year sukuk in February, the largest ever public issuance from the multilateral lender. IDB usually prints one public transaction a year, with plans to issue a benchmark-sized - around $500 million - sukuk around May of next year.

Fitch Ratings has upgraded Luxembourg-based ATLANTICLUX Lebensversicherung S.A.'s (ATL) Insurer Financial Strength (IFS) rating to 'BBB+' from 'BBB'. Moreover, its Long-term Issuer Default Rating (IDR) was upgraded to 'BBB' from 'BBB-'. The Outlook is Stable. At the same time Fitch has upgraded ATL's SQ ReVita Value of Business In-Force transaction and its Salam III Sukuk (Islamic bond) programme to 'BBB' from 'BBB-'. The upgrade reflects ATL's track record of strong profitability, low investment risk and its strong capital position. However, these positive rating factors are partly offset by ATL's dependence on unit-linked products and its fairly small size.

Qatar Islamic Bank (QIB) and Turkey's Bank Asya have ended exclusive talks over QIB acquiring a stake in the Turkish lender, with valuation concerns said to be behind the decision. Turkish state bank Ziraat Bank may now be the most likely partner for Bank Asya but the two banks have not officially begun talks. It is not clear what size stake has been under discussion. Bank Asya shares slumped 9.9 percent to 1.36 lira, their lowest since April 1, by 1304 GMT, on the news that Asya was no longer holding exclusive talks with QIB. Islamic lender Bank Asya has been under pressure to sell assets, after major investors sympathetic to Turkish Prime Minister Tayyip Erdogan withdrew deposits.

Turkish lender Turkiye Finans Katilim Bankasi plans to sell 3 billion ringgit ($933 million) of Islamic bonds in Malaysia. The bank will initially raise 800 million ringgit with a five-year sukuk on June 30 which will have an annual return of six percent. Sukuk under the programme will have a tenure of one to 20 years. Funds raised will go towards general corporate purposes. The so-called sukuk murabaha will be issued through TF Varlik Kiralama, a wholly-owned unit of Turkiye Finans. Malaysia's RAM Ratings has accorded the programme an indicative long-term rating of AA3. HSBC Amanah Malaysia and Standard Chartered Saadiq are joint advisers.

Fitch Ratings has affirmed the Islamic Development Bank's (IDB) Long-term Issuer Default Rating (IDR) at 'AAA' with a Stable Outlook and its Short-term IDR at 'F1+'. The affirmation and Stable Outlook reflect the following key rating factors: IDB is one of the strongest-capitalised multilateral development banks rated by Fitch, with an equity-to-assets ratio of 54% and a debt-to-equity ratio of 79.5% at end-1434H (3 November 2013). Credit risk remains moderate, other risks are manageable. Profits are moderate compared with commercial banks, but are steady and in line with peers, ensuring regular equity strengthening. Shareholder support, a secondary rating driver, remains strong.