Sukuk

Albaraka Turk issues TRL 600 million dual-tranche #Sukuk

Albaraka Turk Katilim Bankasi has issued TRL 600 million dual-tranche Sukuk through its subsidiary Bereket Varl?k Kiralama Sirketi. While the targeted total amount of the issuance was TRL 450 million, the total amount reached TRL 600 million. The certificates had two different tenors as 98 days and 147 days and the size of each tranche was TRL 450 million and TRL 150 million respectively. Malek K. Temsah, Albaraka Turk’s Assistant General Manager of Treasury, said that the uniqueness of this transaction was in its dual-tenured nature, which offered investors additional flexibility.

Islamic finance in Africa to grow as #sukuk issuance strengthens- Moody’s

According to Moody’s Investors Service, Africa’s Islamic banks will continue to perform well and African sukuk issuance will keep expanding steadily. In October and December last year, the governments of Morocco and Nigeria issued $105 million and $327 million of sukuk. In Morocco it was an inaugural issuance and the transaction was 3.6 times oversubscribed. According to the rating agency, structural constraints that have prevented sukuk markets from developing still remain. These constraints include the legislative complexity and time associated with sukuk issuance, especially for new issuers, and the need to identify physical collateral to support the sukuk structure. Moody’s expects robust issuance in African sukuks over the next 18 months. Egypt, Algeria and Sudan have recently expressed interest in issuing sukuk.

Dubai's Emaar Properties sells $500 million 10-year #sukuk

Dubai's Emaar Properties is set to raise $500 million from the sale of sukuk. The transaction has received orders of nearly $2.5 billion, including $300 million of interest from the banks arranging the deal. The deal is part of a $2 billion debt programme and is offering investors a profit rate equivalent to 235 basis points over mid-swaps.
Standard Chartered acts as coordinator. Other banks leading the transaction are Dubai Islamic Bank, Deutsche Bank, Emirates NBD Capital, First Abu Dhabi Bank, Mashreqbank and Sharjah Islamic Bank.

Emaar Properties hires banks for 10-year dollar #sukuk deal

Dubai’s Emaar Properties has hired banks to arrange investor meetings ahead of the issuance of 10-year dollar sukuk. Emaar Properties will meet investors in Asia and London starting on Sept 6. Standard Chartered was hired to coordinate the deal. Other banks leading the transaction are Dubai Islamic Bank, Deutsche Bank, Emirates NBD Capital, First Abu Dhabi Bank, Mashreq Bank and Sharjah Islamic Bank.

Islamic Development Bank hires banks to raise more than $1 bln in #sukuk -sources

The Islamic Development Bank (IsDB) has hired banks to arrange a new issue of U.S. dollar-denominated sukuk, which is expected to be more than $1 billion in size. Hired banks include Emirates NBD, Standard Chartered, Gulf International Bank and HSBC and the transaction is expected to take place next month. IsDB was last in the market in April this year with a $1.5 billion five-year sukuk deal. It generally issues dollar-denominated bonds twice a year, and last year it also sold its first sukuk denominated in euro. The new transaction will be more than $1 billion in size, with one of the sources saying it could go up to $1.5 billion.

Global #sukuk issuance to equal $130bln in 2019

According to Moody's Investors Service, the value of global sukuk issuance is expected to increase by 6% to reach $130 billion in 2019. That forecast can be ascribed to the increase in sukuk activity in Saudi Arabia and Malaysia, which manifested by the issuance of $87 billion sukuk in the first six months of 2019. Moody’s senior vice president Nitish Bhojnagarwala expects second-half volumes to moderate to around $43 billion, though Malaysia and Gulf Cooperation Council countries will continue issuing regularly. Key Islamic finance markets are working on adjusting their funding mix to support a long-term growth in sukuk volumes. As awareness towards the risk of climate change increases, the green sukuk market is expected to grow further.

#Indonesia raises 8 trln rupiah from Islamic bonds auction, matches target

Indonesia raised 8 trillion rupiah ($561.01 million) in a biweekly Islamic bond auction on Tuesday. According to the financing and risk management office at the finance ministry, the sukuk issuance matched the indicative target. The weighted average yields of project-based sukuk sold on Tuesday were lower compared with yields of comparable sukuk at the previous auction on Aug. 6. Total incoming bids were 21.4 trillion rupiah. ($1 = 14,260.0000 rupiah)

Bank Islam top domestic #sukuk #broker in 1H19

Bank Islam Malaysia is the top domestic sukuk broker for the first half of the year (1H), after helping issue US$5.15 billion (RM21.21 billion) worth of sukuk in the market. Bank Islam’s market share of the sukuk issued accounted for 29.03% of the total ringgit-denominated sukuk issued in the 1H. The bank advised on 10 issues for the period. The second-largest issuer in the 1H is Maybank Investment Bank, which was ranked first last year for the same period after having helped issue US$4.1 billion of sukuk. Analysts expect the local sukuk market to remain active driven by capital raising by government and corporates for major construction works such as the East Coast Rail Link, Light Rail Transit Line 3 and Mass Rapid Transit Line 3 projects.

Moody’s upgrades AHB Sukuk Company Ltd.’s #sukuk programme to (P)A1 and its USD500 million senior note to A1 following guarantee by Abu Dhabi Commercial Bank

Moody's Investors Service upgraded to (P)A1 from (P)A2 the provisional foreign currency senior unsecured MTN rating of AHB Sukuk Company Ltd. The AHB Sukuk Company is a special-purpose vehicle established in the Cayman Islands by Al Hilal Bank. Moody's also upgraded to A1 from A2 the backed senior unsecured rating on AHB Sukuk Company Ltd.'s outstanding USD500 million senior unsecured note due 19 September 2023. The outlook on AHB Sukuk Company Ltd.'s senior unsecured note remains stable. The upgrades are driven by the issuance on 2 July 2019 by Abu Dhabi Commercial Bank (ADCB) of a guarantee covering AHB Sukuk Company Ltd.'s sukuk programme and its USD500 million senior note, and follows ADCB's acquisition of Al Hilal Bank on 1 May 2019.

#Kuwait's Warba Bank plans $500 mln #sukuk issue this year - CEO

Kuwait's Warba Bank is working to set up a sukuk programme of up to $2 billion with an initial $500 million issuance this year. CEO Shaheen Al-Ghanem said the programme is subject to central bank approval. After the initial issuance this year, the rest would be issued over the next few years as needed and the proceeds used to finance operational matters. Ghanem added that the bank was looking to start a new asset management business this year aimed at overseeing about $500 million in investments within the next three years. Its launch is awaiting final approval from the Kuwait Capital Markets authority. The bank is looking to increase its total assets to over 3.5 billion Kuwaiti dinars ($11.52 billion) by 2022 from 2.59 billion dinars. Additionally, the bank is competing to lead a 350 million Kuwaiti dinar ($1.15 billion) loan for Kuwait Petroleum Corporation (KPC) that will likely involve multiple banks.

Sharjah Islamic Bank raises $500mln #sukuk

Sharjah Islamic Bank (SIB) raised $500 million in its debut Additional Tier 1 (AT1) sukuk at the lowest price of 5%. Accordingly, the bank’s AT1 Sukuk yield is the lowest in the region, down from 5.25% in 2015. The lender has received orders of $4.8 billion or 9.5x oversubscription from many investors, as well as nearly 209 individual orders from Asia, GCC, and Europe. SIB has appointed Citi, HSBC, and Standard Chartered Bank as joint global coordinators. It also hired Joint Structuring Agents along with Abu Dhabi Islamic Bank, Bank ABC, Citi, Deutsche Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, KFH Capital, and Standard Chartered Bank as the joint lead managers and joint bookrunners. The sukuk is a Non Call 6 years Perpetual Instrument which will reset to 6 years Treasuries in 2025.

Saudi Arabian issuers boost #sukuk in first five months of 2019

According to S&P Global Ratings, the sukuk market enjoyed a strong start to the year but it may not last. S&P Global Ratings Head of Islamic Finance, Mohamed Damak said high levels of liquidity in Indonesia, Turkey's efforts to tap all available financing sources, and the return of Qatari and Saudi Arabian issuers to the market have boosted issuance of sukuk 17.6% in the first five months of 2019. S&P expects the total Sukuk issuance will average $105 billion-$115 billion this year, assuming the Brent oil price stabilizes at $55 per barrel. This follows a mild performance in 2018 when issuance dropped to $114.8 billion, a 5% decline compared with 2017; US dollar Sukuk alone fell by 15% year on year. Tightening liquidity conditions, high geopolitical risks in the Middle East, and challenges inherent to sukuk issuance will likely dampen sukuk market performance in 2019.

Sharjah Islamic Bank mandates banks for capital boosting #sukuk

United Arab Emirates’ Sharjah Islamic Bank has hired banks to arrange investor meetings ahead of an issuance of U.S. dollar-denominated sukuk. Citi, HSBC and Standard Chartered have been hired to coordinate the deal, and they are bookrunners along with Abu Dhabi Islamic Bank, Bank ABC, Deutsche Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, and KFH Capital. The planned sukuk deal will boost the bank’s Tier 1 core capital.

Dubai developer The First Group to issue $135mln #sukuk

Dubai-based real estate developer The First Group plans to issue $135 million in sukuk. The developer has appointed investment bank Shuaa Capital to arrange the planned transaction. The First Group specialises in hotel investments. It has completed 11 projects in the UAE to date and has seven hospitality developments under construction. This issuance is one of few debt issues in the pipeline in the Gulf region after business slowed sharply during the holy month of Ramadan, which ended last week.

#UAE's Sharjah Islamic Bank readies capital-boosting dollar #sukuk

Sharjah Islamic Bank is expected to issue U.S. dollar-denominated sukuk by the end of June to boost its Tier 1 core capital. The bank's board approved earlier this year the issuance of sharia-compliant Tier 1 instruments for up to 2.8 billion dirhams ($762 million). Last year, Sharjah Islamic raised $500 million in sukuk with HSBC and Standard Chartered as global coordinators, attracting around $950 million in orders. A few other Gulf issuers are also expected to tap the international debt markets over the coming weeks, taking advantage of cheaper funding costs after a drop in yields on the benchmark U.S. Treasury rates.

OPINION: #Sukuk bonds becoming increasingly mainstream

According to Dino Kronfol, CIO at Franklin Templeton Investments, the future is bright for investing in sukuk. He is confident that sukuk could provide the stability that mitigates an uncertain global economy, particularly as more risk management tools become increasingly integrated into sukuk products. Governments and financial institutions are the biggest sukuk issuers globally, so their role in terms of pushing for market growth and development will remain vital. Asia has seen the volume of sukuk issuances decline 4% on average over the past five years. Kronfol thinks this trend should reverse as issuances come from new sources and attract more investors. Already, the number of sukuk issuers is expanding: Nigeria, Pakistan, Hong Kong, Turkey and Indonesia have become more significant in recent years. One further possibility could be Chinese issuers looking to diversify their sources of funding.

KIB issues $300 million AT1 #sukuk

Kuwait International Bank’s (KIB) Chairman Sheikh Mohamed Jarrah Al Sabah announced the issuance of an AT1 Sukuk. On Wednesday 29 May 2019, KIB has successfully priced a $ 300 Million AT1 perpetual Sukuk that classifies under Tier 1 capital at an annual profit rate of 5.625%. KIB received an immense investor demand as evidenced by an oversubscription rate of over 15 times. This issuance has been arranged with efforts made by a group of participating parties including Citi and Standard Chartered who acted as Joint Global Coordinators. Dubai Islamic Bank, First Abu Dhabi Bank, KFH Capital and KAMCO acted as Joint Lead Managers and Bookrunners. Boubyan Bank acted as Co-Manager.

#Kuwait International Bank starts marketing $300mln #sukuk

Kuwait International Bank started marketing $300 million perpetual sukuk to boost its tier 1 capital, with a yield of around 6.25%. Perpetual bonds mimic some of the characteristics of equity because they lack a maturity date. Citigroup, Dubai Islamic Bank, First Abu Dhabi Bank, KAMCO Investment Co, KFH Capital Investment Company, and Standard Chartered Bank have been hired to lead the transaction.

Malaysia leads global sukuk issuance

Malaysia continued to maintain the leadership as the largest issuer of sukuk globally with a total of US$13.9 billion in the first three months of 2019. This means a market share of 35.2% from the overall issuance of US$39.5 billion during the period. This also represented an increase of 54.4% compared with US$9 billion that Malaysia issued in the first quarter of 2018.

Global #sukuk market to hit $2.7trln by 2030: Franklin Templeton

According to investment management firm Franklin Templeton, the global sukuk market is set to grow at a compound annual rate of around 15% to reach $2.7 trillion by 2030. Global sukuk issuance stood at over $477 billion at the end of last year, but has slowed somewhat in recent years. Ratings agency S&P in January described sukuk issuance as 'mild' in 2018, as the total amount of sukuk issued dropped by 5% to $114.8 billion. It forecast issuance of $105 billion-$115 billion for 2019. Mohieddine Kronfol, head of fixed income at Franklin Templeton, forecasts that the growth continues at a relatively rapid pace. In GCC markets several corporate entities have been issuing debut sukuk in recent months. Saudi Telecommunications Company issued its debut $1.25 billion sukuk on Sunday, following on from Saudi food company Almarai’s first $500 million sukuk in February.

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