Sukuk

Why we rejected N21.5bn #Sukuk bond – #Niger speaker

Speaker of the Niger State House of Assembly, Alhaji Ahmed Marafa Guni, has explained why the house rejected to access N21.5 billon Sukuk bond for infrastructure development. He said the house discovered a lot of discrepancies in the bond deal and, therefore, decided to send it back to the Executive. He added there were hidden costs in the loan which would tie down the state for several years. The speaker said the sukuk request could still be re-presented if those discrepancies are addressed. The government said it had asked the assembly to stay action on the request because of insinuations that the money was meant for the 2019 general election campaign.

Will Islamic bonds help revive #Egypt's economy?

The Egyptian government plans to issue dollar-dominated and euro-dominated sukuk over the next fiscal year. Finance Minister Mohamed Maait made the announcement, expecting that the issuance of the Sharia-compliant bonds would attract huge demand. He added that the government would introduce amendments to the existing laws to enable the issuance. On April 11, the government approved a draft law to establish a sovereign fund aimed at making the best use of state assets with a capital of 5 billion Egyptian pounds (about $279 million). The Egypt Fund will benefit several infrastructure projects, create more job opportunities and reduce the budget deficit. The Egyptian government is also planning to float shares in state-owned companies to draw more local and foreign investors to the stock market.

#Maroc : Vers le lancement du premier #sukuk souverain

Le royaume chérifien se prépare à lancer son premier sukuk pour un montant de 105 millions de dollars. Le ministre des Finances, Mohamed Boussaïd s’est voulu clair et rassurant indiquant notamment que le Maroc émette son premier sukuk souverain dans les semaines à venir. D’est pour la matérialisation de cette émission que le Conseil des ministres, tenu le 7 juin 2018 a adopté un projet de décret permettant aux autorités monétaires de fixer les caractéristiques et les modalités d’émission des sukuk souverains. La Banque centrale marocaine avait accordé des licences à cinq banques islamiques et autorisé trois autres banques traditionnelles à ouvrir des fenêtres islamiques.

New #Egypt Finance Chief Looks to #Sukuk for Funds

Egypt is considering tapping the international sukuk market in the coming fiscal year, as it looks to diversify funding sources. The issuance would mark a revival of a plan shelved since 2013 when the government issued the law to pave the way for the country’s first Islamic bond. Finance Minister Mohamed Maait said that the ministry has yet to discuss how much it wants to raise from conventional bond sales in the coming fiscal year. The focus is shifting toward long term borrowing. The government is also planning on launching the first offerings of stakes in public sector companies in July or August. The initial stakes are expected to raise between 15 billion and 18 billion pounds.

#Morocco to issue first sovereign Islamic bond worth 1 bln dirhams

Morocco is preparing to issue its first sovereign sukuk worth 1 billion dirhams ($105 million). According to Finance Minister Mohamed Boussaid, the legal framework is now prepared and issuance is expected in the coming weeks. Earlier, the cabinet adopted a decree allowing financial authorities to define different types of sovereign sukuk, in line with the opinion of Morocco's council of Muslim scholars. Last year, Morocco's central bank approved five requests to open Islamic banks and allowed subsidiaries of three French banks to sell Islamic products. Morocco is the most advanced among its North African neighbours in developing Islamic finance, but Tunisia and Algeria have also started to explore Islamic banking.

Fitch: #UAE Reforms Aid #Sukuk Market; Implementation Still Key

The UAE's Securities and Commodities Authority (SCA) said that issuers of Islamic securities should improve disclosure. Issuers should specify how transaction resources and revenues would be treated if a security were deemed no longer compatible with the provisions of sharia. Issuers should also specify whether the Islamic securities being issued are tradeable under sharia rules. In addition, the SCA set out basic provisions for the composition and responsibilities of sharia boards. The SCA regulation provides a general framework for disclosure around these issues, not a detailed template. Nevertheless, the regulation is one of a number of initiatives that could support the UAE's sukuk market.

#Malaysia to retain position as world's premier #sukuk issuer

Malaysia will remain the market leader in global sukuk issuance despite recent delays and cancellations of mega projects. CIMB Islamic Bank CEO Rafe Haneef said the delays of some mega projects would have some impact sukuk deals, but it is still business as usual for Malaysia. Last year, Malaysia had issuances of over US$50 billion. According to Moody’s Investor Services, Malaysia continues to remain the world’s largest sukuk with an estimated 44% of total sovereign sukuk outstanding in 2017. Issuance grew 17% in 2017 to some US$100 billion. CIMB Investment Bank topped Bloomberg’s Underwriter League Table for ringgit bonds for 12 years running. Going forward, Rafe expects issuances will come from both the infrastructure and corporate space.

Dana Gas gets wide support from creditors for #sukuk restructuring

UAE energy producer Dana Gas announced that a large majority of holders of its outstanding $700 million sukuk had consented to a proposed restructuring of the notes. The company, which last year refused to repay creditors, reached last month a restructuring agreement after a long and complex legal battle. Following the launch of a tender and exchange offer on May 22, 93.69% of the holders approved the terms of the proposed restructuring, exceeding the minimum required 75% approval threshold.

#Sukuk issuance growth to remain 'unspectacular' on structural constraints, Fitch says

According to Fitch Ratings, the moderate growth in sukuk issuances in the first quarter underpins continued investor interest, but it also points out to structural constraints. The total volume of sukuk rated by Fitch for the three-month period through to March end, stood at $80 billion (Dh294bn), a 6% rise from the figures recorded at the end of 2017. New sukuk issuance with a maturity of more than 18 months from the Arabian Gulf states, Malaysia, Indonesia, Turkey and Pakistan came in at $14.9bn for the first quarter of 2018, a modest 1% year-on-year rise. The issuances during the first quarter of 2018 were largely driven by the GCC region, whose funding needs are likely to fall if oil prices stay high. Issuer funding needs and investor appetite for the remainder of the year will be determined by factors including oil prices and tighter global financing conditions.

Global #Sukuk issuances surges 44 per cent in Q1

According to the latest statistics by RAM Ratings, a total of $12 billion worth of Sukuk was issued in March 2018, bringing global Sukuk issuance to $30 billion in Q1 2018, a 44.4% surge from $20.8 billion for the same period last year. The increase is likely due to a boost from Saudi Arabia with issuance reaching $6.5 billion as at end-March 2018. Malaysia had issuances rising from $9.6 billion to $11.5 billion, accounting for the second-largest year-on-year increase, followed closely by Indonesia at $5.5 billion, the UAE at $3.3 billion and Turkey at $1.4 billion. Malaysia retained the top spot in terms of global Sukuk issuance with a 38.2% market share worth $11.5 billion as at end-March 2018. Saudi Arabia stayed in second place with a 21.7% share worth $6.5 billion, Indonesia closed on third place with 18.2% and the UAE with 10.8%.

#Saudi Arabia's #Sukuk selling crosses SAR 3.95 bn

Saudi Arabia's finance ministry sold 3.95 billion riyals (USD1.05 billion) of domestic Sukuk in its monthly sale by re-opening an issue originally made last month. It sold 3.35 billion riyals of five-year Sukuk, 350 million riyals of seven-year and 250 million riyals of 10-year. Last month, the ministry sold 5.0 billion riyals of domestic Sukuk.

Fitch issues rating for KFH #Sukuk

Fitch Ratings has assigned Kuwait Finance House’s sukuk programme an expected A+ and F1 rating. KFH Sukuk, the issuer and trustee, is a special purpose vehicle (SPV), incorporated in the Dubai International Financial Centre (DIFC), solely to issue certificates (sukuk) under the programme. The trustee has been incorporated solely for the purpose of participating in the transactions contemplated by the transaction documents.

Dana Gas CEO talks about Sukuk Litigation to protect assets on Bloomberg TV

Dana Gas CEO Patrick Allman-Ward discusses the company's Sukuk litigation and performance. Click on th source.

#Sukuk issuance: QIIB weighs market mood

Qatar International Islamic Bank (QIIB) is waiting for the right time to issue its $500m sukuk in the international market. QIIB CEO Abdulbasit Ahmed Al Shaibei said that QIIB is currently weighing market conditions before the issuance of the 5-year sukuk. QIIB is not in a hurry to hit the market, as it does not face any kind of liquidity issues. The lead arrangers of the QIIB issuance will be QNB, Standard Chartered and some Malaysian Banks. The tenor would be 5 years. QIIB issued its first sukuk in 2012 for $700 and it matured in October 2017. The bank’s $2bn Trust Certificate Issuance programme has already been approved by the UK Financial Conduct Authority (the FCA) and is being admitted to the official list of the FCA and the London Stock Exchange. The Programme has been assigned a provisional rating of A2 by Moody’s Investors Service Cyprus.

Damac Properties lists $400m #sukuk on Nasdaq Dubai

Damac Properties listed $400 million (Dh1.4 billion) sukuk on Nasdaq Dubai. It is the third Sukuk listed by Dubai-based Damac Properties on Nasdaq Dubai, following a $650 million Sukuk listed by the company in April 2014 and a $500 issuance in April 2017. Damac Chairman Hussain Sajwani said Damac continues to expand its development portfolio at home and internationally. Furthermore, the listing on Nasdaq Dubai provides them high visibility around the world and an excellent regulatory framework. Dubai's sukuk listings have now reached a total nominal value of $59.72 billion, the highest amount of any listing venue in the world.

Green #sukuk creates ripples on prominent environmental concerns

According to Securities Commission Malaysia (SC) deputy CEO Datuk Zainal Izlan Zainal Abidin, the world will need up to US$90 trillion (RM360 trillion) worth of investments for infrastructure by 2030. This presents a significant opportunity for green finance and green sukuk to be part of the mainstream investment for the financing solutions. In July 2017, SC, Bank Negara Malaysia and the World Bank Group established the country’s first green sukuk. Green sukuk has become the trend that has received support from investors and regulators on a global scale. NewParadigm Capital Markets Managing Director Charanjeev Singh says more green sukuk issuances are expected to take up the Islamic finance space as Malaysia continues to be the catalyst for Islamic bonds. So far, the focus has been big government-owned companies. The next level of development would be to facilitate the middle- market or the mid-sized companies, and not necessarily the government- owned or government-linked, but the A or AA ratings.

#UAE’s Dana Gas agrees $700m #sukuk restructuring deal

Dana Gas has reached agreement with creditors on restructuring $700m of sukuk. Under the deal with the sukuk holders’ committee, investors who want to exit the instruments can do so in a tender at 90.5 cents on the dollar. Alternatively, investors can exchange the sukuk for new three-year Islamic instruments with a 4% profit rate, while receiving final profit payments that they were owed before the old sukuk matured last October 31. Holders representing more than 52% of $350m of sukuk convertible into equity, and 30% of $350m of non-convertible sukuk, agreed to take no further action before the tender. The deal would require the support of 75% of sukuk holders and would then become compulsory for the rest. Dana’s shares jumped 3.9% on Sunday after news of the deal.

Islamic Finance’s #Sukuk innovation needs to go further

As opposed to earlier structures, today’s sukuk come with a variety of features. There are two broad thrusts in the innovation that has taken place. First, the use of embedded options for better risk management and second, innovation seeking to overcome limitations like the need for physical underlying asset. For example, a call option which provides the right to purchase an underlying asset at a predetermined price is typically embedded to minimize the risk to the obligor. An embedded put option on the other hand favors the sukuk-holder. The put enables the holder to sell the underlying asset to the obligor at a predetermined price. A number of Islamic banks have issued perpetual sukuk with embedded call options for the purpose of meeting their Basel III capital adequacy requirements. Also, sovereign wealth funds like Malaysia’s Khazanah have issued “Exchangeable Sukuk” which allow the holders to either convert the sukuk to the underlying asset, or redeem the sukuk at face value. While sukuk design has come a long way, they need to move toward an even more enhanced risk-sharing.

Dana Gas close to a deal on $700m #sukuk dispute, say sources

Dana Gas has reached an agreement with key holders of $700m of its sukuk to restructure the securities. A committee representing sukukholders agreed to accept an immediate cash payout of 20 cents to the dollar and to roll the rest into a three-year security. According to the agreement, the new security will pay an annual coupon of 4%, bondholders agreed to remove the convertible option in the securities. Dana Gas said it would pay a further 20% of the sukuk after two years and will raise the coupon to 6% if it fails to do so. The majority of sukukholders have agreed to the terms. Investment bank Houlihan Lokey is advising Dana Gas and Moelis & Co is the consultant to the committee of sukukholders.

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