Sukuk

#Kuwait's Warba Bank gets central bank approval for $250 million #sukuk

Warba Bank has received approval from the central bank of Kuwait to issue up to $250 million of sukuk. The bank will take a final decision on the issuance and its timing after obtaining remaining regulatory approvals. The funding would be used to boost Warba's Tier 1 capital. Warba Bank is an Islamic lender established in 2010.

#Saudi minister says future borrowing may include Islamic bonds

According to Finance Minister Ibrahim al-Assaf, Saudi Arabia may follow its first international debt issuance with an Islamic bond sale. The size of future borrowing hasn’t been determined, but it will not be limited to bonds. Assaf said that part of it will be by the way of sukuk, but he didn’t specify whether the sukuk sale would be local or global. Saudi Arabia raised $17.5 billion this month in the biggest-ever foreign bond from an emerging-market nation. The kingdom is seeking to finance a budget deficit that ballooned to about 15 per cent of economic output last year.

#Indonesia unveils #waqf based #sukuk

Bank Indonesia (BI) unveiled a waqf-based sukuk, aimed at developing social property assets to be commercially self-sustaining. BI Deputy Governor Hendar said the sukuk could further finance the development of commercial buildings such as office towers or shopping centers over waqf land. The coupon will be paid from the recurring income of the assets. According to Muhammad Anwar Basori, BI head of the sharia economic and finance department, waqf land was traditionally used for social and public purposes such as cemeteries, mosques, or schools. Waqf-based sukuk could be a solution and could provide cash to cover maintenance costs. Basori added there are 400,000 hectares of waqf land in Indonesia, 90% of which are cost centers. In Kuwait and Singapore, they have built many productive assets on waqf land.

Islamic Development Bank appoints nine banks for five-year #sukuk -bankers

The Islamic Development Bank (IDB) has appointed nine banks to arrange a new Islamic bond issue likely to be in excess of $1 billion. The mandated banks include Boubyan Bank, Credit Agricole, Gulf International Bank, JP Morgan, Mizuho, Natixis, NBAD, RHB and Standard Chartered for a five-year debt issue. The mandate was given at the end of last week and the notes will be sold only after the U.S. elections on Nov. 8. IDB sold its last U.S. dollar-denominated sukuk in March. That issue, of $1.5 billlion, offered 50 basis points over midswaps and was priced at par at 1.775 percent.

#Malaysia eyes #sukuk ties with #Qatar

Malaysian Minister of International Trade and Industry, Mustapa Mohamed underscores the importance of promoting its sukuk market to Qatar. Mohamed suggests to promote Malaysia’s sukuk industry and to invite the Qatar Financial Centre (QFC) and Qatar-based Islamic banks to Malaysia and explore avenues for partnerships. The minister was in Qatar yesterday for a brief visit and met with major Malaysian companies and witnessed the signing of an MoU between Masskar Hypermarket and Infinity Channel. The minister said that there are several Malaysian companies in Qatar that would want to do more business in the fields of construction, services, consultancy, IT, and engineering. Malaysian ambassador Ahmad Jazri Mohamed Johar added that the minister’s visit also aims to enhance bilateral relations between Qatar and Malaysia, whose trade volume stood at around $1bn in 2015.

#Sukuk bonds issuance will grow in West Africa, says Hogan Lovells

According to law firm Hogan Lovells, the launch of Sukuk bonds by three West African governments will open up a vast financing channel for the region. Hogan Lovells advised the Islamic Corporation for the Development of the Private Sector (ICD) as lead arranger on the issuance of three sovereign Sukuks in West Africa. These include Cote d’Ivoire, Senegal and the Republic of Togo. The Sukuks were listed on the Bourse Régionale des Valeurs Mobilières (BRVM), Abidjan, Cote d’Ivoire. Altogether with the debut issuances for Senegal and Cote d’Ivoire, the combined listing value was CFA 766 billion. Imran Mufti, who led the Hogan Lovells’ team, said the landmark Sukuk bonds will enhance the development of Islamic finance in West Africa.

Ahli United Bank $200 million Perpetual Additional Tier 1 #Sukuk oversubscribed

Ahli United Bank (AUB) has concluded the subscription of its issue of a $200 Million Perpetual Additional Tier 1 Sukuk. The Bank’s Chairman, Anwar Al Mudhaf, expressed his appreciation to the Central Bank of Kuwait and the Capital Markets Authority, to the many investors both in Kuwait and abroad and to the Bank’s team. CEO Richard Groves said the sukuk had been oversubscribed by over three times more than the targeted amount. This was achieved in less than one week from the date of the announcement, with a roadshow covering meetings in Asia, the Middle East and Europe. The Perpetual Additional Tier 1 capital issue Sukuk is issued in compliance with the requirements of Basel III, the regulations of the Central Bank of Kuwait as well as in compliance with the regulations of the Capital Markets Authority.

CIMB IB top lead manager for bonds, #sukuk

CIMB Investment Bank (CIMB IB) came out tops on RAM Rating Services' league tables for both corporate bonds and sukuk as at end-September 2016, after having arranged RM21.25 billion worth of RAM-rated corporate bonds and sukuk. The amount represents 56% of the RM37.88 billion RAM-rated corporate bonds and sukuk in the first nine months of the year. In terms of sukuk programme value, Maybank Investment Bank (Maybank IB), which has arranged RM12.54 billion or 72% of RAM-rated sukuk, takes the lead. As at end-September 2016, outstanding corporate bonds stood at RM536.5 billion, while the gross issuance of corporate bonds and sukuk amounted to RM66.4 billion, almost 50% higher than last year’s January-to-September period. RAM anticipates the corporate bond market to chart a steady course through the remainder of 2016.

Local banks' #sukuk value still lagging

#Malaysian banks may have dominated the sukuk market but in value terms the world’s top three sukuk managers, namely HSBC, Standard Chartered and JPMorgan Chase are ahead of any of the local top banks. Second Finance Minister Datuk Johari Abdul Ghani said that despite accounting for 54% of the global sukuk issuances, the country still lags behind global banks. He said local banks could not compete on this front because Malaysia lacks the presence of an Islamic mega bank. Malaysia had in the last 12 months issued 25 of the 30 largest sukuk issuances which collectively totalled US$37 billion (RM154 billion) in value. Thirteen of these sukuk offerings were domestic offerings. Johari urged the 57 member states of the Organisation of Islamic Cooperation (OIC) to consolidate their capabilities to produce higher global gross domestic product (GDP).

#Jordan closes its Inaugural Sovereign Local Currency #Sukuk in Cooperation with Islamic Corporation for the Development of the Private Sector (ICD) and Japan International Cooperation Agency (JICA)

The Kingdom of Jordan closed its inaugural local currency Sukuk, which was more than three-times oversubscribed. The Kingdom raised Jordanian Dinar JOD 34 million (USD 47.9 million) maturing in 2021, with an expected profit rate of 3.01%. The Islamic Corporation for the Development of the Private Sector (ICD) acted as Transaction Technical Support and Advisor. The sovereign issuance is part of a comprehensive joint-Technical Assistance Package provided by Japan International Cooperation Agency (JICA) and ICD. According to Finance Minister Omar Malhas, Jordan aims to widen the use of Sukuk in the short-term. The Sukuk will play a critical role in increasing the effectiveness of the financing mechanisms of government needs to cover the budget deficits.

AUB #Kuwait #sukuk perpetual in motion as guidance tightened

Ahli United Bank Kuwait has opened books on a perpetual dollar sukuk after wrapping up investor meetings on Monday. Books were oversubscribed and were due to close on Tuesday. Citi, Credit Agricole and Credit Suisse ran the roadshow, which started in Abu Dhabi and Dubai last Wednesday before taking in Zurich and Geneva, London and Singapore. Books were opened at 5.75% area on Monday before guidance was refined to 5.5%-5.875%.

Fitch Rates Kuveyt Turk's #Sukuk 'BBB(EXP)'

Fitch Ratings has assigned Kuveyt Turk's proposed US dollar-denominated sukuk certificates an expected 'BBB(EXP)' rating. The expected rating is in line with Kuveyt Turk's Long-Term Issuer Default Rating (IDR) of 'BBB', which has a Negative Outlook. The issuer is KT Kira Sertifikalari Varlik Kiralama (KKSVK), which is wholly owned by Kuveyt Turk. The documentation includes a negative pledge provision that is binding on Kuveyt Turk, as well as financial reporting obligations, covenants, Kuveyt Turk event (including cross default) and change of control clause. Certain aspects of the transaction will be governed by English law while others will be governed by Turkish law.

Maybank Islamic, CIMB Islamic partake in IILM’s US$1.11bil #sukuk

The International Islamic Liquidity Management Corporation (IILM) has conducted an auction of US$1.11bil (RM4.63bil) three-month tenor sukuk priced at 1.35389% profit rate. The IILM said the 11 primary dealers that participated in the Sukuk offering were Abu Dhabi Islamic Bank, Al Baraka Turk, Barwa Bank, Boubyan Bank, CIMB Islamic Bank, Kuwait Finance House, Maybank Islamic, National Bank of Abu Dhabi, Qatar Islamic Bank, Qatar National Bank and Standard Chartered Bank. The IILM Sukuk is rated A-1 by Standard & Poor's Rating Services and the 29th series brings the total cumulative amount of the IILM Sukuk that were issued and reissued to US$21.14bil (RM88.14bil).

#Sukuk company granted #tax exemption

In #Pakistan the Federal Board of Revenue (FBR) allowed exemption from withholding tax on purchase of immovable property by the Second Pakistan International Sukuk Company. The company has already enjoyed several exemption and concessions, exemption from levy of various advance taxes, profit on debt and tax on income from property. This further exemption was granted to strengthen the Islamic debt market by attracting investors by grant of tax concessions.

Maybank Islamic, CIMB Islamic partake in IILM’s US$1.11bil #sukuk

The International Islamic Liquidity Management Corporation (IILM) has conducted an auction of US$1.11bil (RM4.63bil) three-month tenor sukuk priced at 1.35389% profit rate. The IILM said the 11 primary dealers that participated in the Sukuk offering were Abu Dhabi Islamic Bank, Al Baraka Turk, Barwa Bank, Boubyan Bank, CIMB Islamic Bank, Kuwait Finance House, Maybank Islamic, National Bank of Abu Dhabi, Qatar Islamic Bank, Qatar National Bank and Standard Chartered Bank. The IILM Sukuk is rated A-1 by Standard & Poor's Rating Services and the 29th series brings the total cumulative amount of the IILM Sukuk that were issued and reissued to US$21.14bil (RM88.14bil).

Source: 

http://www.thestar.com.my/business/business-news/2016/10/12/maybank-islamic-and-cimb-islamic-partake-in-iilms-us$1pt11bil-sukuk/

#GCC sovereigns raise $87bn in bonds, #sukuk since Jan 2015: Samba

According to Samba Financial Group, GCC sovereigns have raised $87bn in both domestic and international bonds and sukuks since January 2015. The largest international issuance so far is the $9bn offering from Qatar in late May. Abu Dhabi also issued eurobonds worth $5bn in May in both five and 10 year tenors, while Oman issued $2.5bn of bonds in May. The markets are waiting on a Saudi issuance, which Samba thinks will be around $15bn later this year, though the government has already secured a syndicated loan worth $10bn. Corporate international debt issuance is also on the rise, with the majority of offerings coming from financial institutions. Since January 2015, UAE banks have issued $10.9bn in bonds. According to Samba, GCC stock markets suffered large losses at the beginning of the year, owing to the general risk-off sentiment and a further decline in oil prices.

Nasdaq Dubai, IdealRatings launch benchmark indices to track performance of #Sukuk

Nasdaq Dubai and IdealRatings has announced the launch of benchmark indices that track the performance of global Sukuk, in order to provide investors with new data to make informed trading decisions. The data includes daily movements in price and total return, with monthly updates on yield and other key indicators. It tracks a universe of more than 1,800 Sukuk globally, with eligibility criteria including a minimum issue size of 100 million US dollars. The Global Sukuk Index covers all currencies and has five sub-indices. The sub-indices reflect distinct segments of the market, which are: investment grade issuances, issuances by sovereigns, issuances by corporates, issuances by financial institutions and GCC issuances. According to Hamed Ali, CEO of Nasdaq Dubai, the indices add a valuable new stream of information to investors’ existing trading tools.

Moody’s: Sovereign #sukuk issuance stable, SEA leads on volumes

According to Moody’s Investor Services, there is stable flow of sovereign sukuk issuance this year, which is set to touch US$28 billion (US$1 = RM4.15) in Southeast Asia. Among the Southeast Asia countries, Malaysia and Indonesia continue to regularly issue long-term sovereign sukuk while Gulf countries favour conventional debt structure to finance their deficit. Moody’s Vice President Gabriel Torres said the governments of Cote d’Ivoire, Senegal and Sharjah returned to the sovereign sukuk market in 2016, but issuance volumes are primarily supported by more regular issuers, such as Indonesia, Malaysia and Turkey. Sub-Saharan African sovereign sukuk issuance is likely to remain active as governments set up regulatory frameworks for a retail Islamic banking sector and test market appetite.

APM to establish #sukuk programmes

In #Malaysia APM Automotive Holdings has proposed to establish an Islamic commercial papers (ICP) programme and Islamic medium term notes (IMTN), with a combined nominal value of up to RM1.5 billion. In a bourse filing APM said the ICP and IMTN programmes will have a tenure of seven years and 20 years respectively, from the date of first issue. The proceeds from the issuance of the sukuk murabahah shall be utilised by the company for general corporate purposes and to refinance future financing of APM and its subsidiaries. APM assured that the utilisation of the proceeds of the sukuk murabahah programmes would be at all times for syariah-compliant purposes.

NB: Figure was amended from RM 3 bn to RM 1.5 bn following correction in original source.

#Sukuk auction criticised

In #Pakistan Chair­man of the Senate Standing Committee on Finance Senator Saleem Mandvi­walla has strongly criticized the issuance of $1 billion sukuk. He said that the hurried decision was an act of im­­maturity by the government and it was expected that the rates would be high. Senator Mandviwalla is surprised that Eurobonds which carry sovereign guarantees were sold at 8.25pc interest rate and sukuk, which are guaranteed by assets, are sold at 5.5pc. He said that the federal government also blamed the higher rate on Pak-India border tensions. He added that it would have been better to wait with the issuance for a more suitable time.

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