Sukuk

Finance islamique : l’ICD accompagne le #Maroc pour émettre ses premiers #Sukuk

Le Maroc a choisi la Société islamique pour le développement du secteur privé – SID (Islamic Corporation for the Development of the Private Sector – ICD) comme arrangeur pour l’émission de ses premiers Sukuk. ICD conseille et accompagne les pays membres pour développer leur marché de capitaux islamiques, à travers l’émission de Sukuk à court, moyen et long terme, permettant aux Etats de diversifier leurs sources de financement. Les premières émissions de Sukuk au Maroc devraient intervenir au cours des prochains mois.

Emaar and Kuwait’s Burgan Bank raise $1.25b as Gulf bond sales soar

Emaar Properties and Kuwait’s Burgan Bank raised $1.25 billion (Dh4.59 billion) from bond sales. Emaar sold $750 million of 10-year Islamic securities, pricing them at 225 basis points over the benchmark midswap rate. Burgan Bank raised $500 million from a sale of five-year dollar securities that will carry a spread of 215 basis points over midswaps. Corporate bond sales are picking up amid a rush of sovereign issuance in the oil-exporting region. Saudi Arabia is expected to raise at least $10 billion in October from its first offering of international securities.

Africa holds huge growth potential

According to Standard & Poor’s Africa’s extensive infrastructure development needs to create a fertile environment for the growth of sukuk issuance over the next decade. S&P analyst Samira Mensah said African sukuk could provide diversification benefits for Islamic investors as well as additional financing opportunities. So far the African market comprises only $2 billion (Dh7.35 billion) of sukuk from a handful of issuers. By contrast, 17 Sub-Saharan African (SSA) governments issued $46 billion of conventional debt in 2015 alone. Despite sukuk’s appeal, analysts expect that only a few African countries will tap the sukuk market over the next 12 months. There is a general lack of clear legal regimes and in many cases the complexity of structuring sukuk could deter issuance. Multilateral institutions could be the key to unlock the full potential of Africa's sukuk market.

Emaar Properties mandates banks for US dollar #Sukuk

Emaar Properties has mandated Standard Chartered Bank as Sole Global Coordinator of its new US dollar Sukuk. Bank ABC, Dubai Islamic Bank, Emirates NBD Capital, First Gulf Bank, Mashreq, National Bank of Aub Dhabi, Noor Bank, Standard Chartered Bank and Union National Bank are mandated as Joint Lead Managers to arrange investor meetings in Asia, the Middle East and Europe commencing on 4 September 2016. USD 2 billion Trust Certificate Issuance Programme may follow subject to market conditions. FCA/ICMA stabilization applies.

Dubai's Emirates Islamic Bank prices $250m #sukuk tap

Dubai-based Emirates Islamic Bank has priced a $250 million tap of an existing Islamic bond issued in May. The tap was priced at 170 basis points over midswaps, the order book was worth $706 million. The 'new' deal is a copy of an existing bond with the same terms and conditions. Emirates Islamic's tap came off a $750 million five-year sukuk issued on May 23. That deal was priced at 220 bps over midswaps and carried a coupon of 3.542 percent. Chief Executive Jamal bin Ghalaita said the cash would support the bank's long-term growth and development plans. The new offering was arranged by Bank ABC, Dubai Islamic Bank, EMCAP and Standard Chartered.

#Saudi Arabia's Bank Al Bilad prices 2 bln riyal #sukuk issue

Saudi Arabia's Bank Al Bilad priced an Islamic bond issue worth 2 billion riyals ($533 million) at 200 basis points above the three-month Saudi interbank offered rate. The sukuk have a tenor of 10 years, with the bank having the right to call the bond at the end of the fifth year. They were sold through a private placement. Bank Al Bilad said the raised funds would support its capital base in line with Basel III standards.

#Sukuk pipeline - Issue plans around the world

Following are major Islamic bond issues in the global pipeline. Pakistan plans an international issue of sukuk and is asking banks for expressions of interest in managing the sale. Sharjah Islamic Bank said it would begin investor meetings on Aug. 29 for a potential benchmark U.S. dollar-denominated sukuk issue. Ahli United Bank Kuwait has obtained approval from Kuwait's central bank to issue capital-boosting sukuk worth up to $200 million. Ivory Coast plans to complete a sale of 150 billion CFA francs ($263 million) worth of seven-year sukuk on Aug. 31.

Poll: helping #sukuk take off

JP Morgan's plans to include sukuk in its major bond indices from October will be a boon for the market. Sukuk is commonplace in the Middle East and Southeast Asia. But only a handful of western governments have issued one, with the UK in particular making headlines in 2014. This month's poll is asking readers exactly what's holding back the global sukuk market.

Sharjah Islamic Bank plans benchmark dollar #sukuk issue

Sharjah Islamic Bank will begin investor meetings on Aug. 29 for a potential benchmark U.S. dollar-denominated sukuk issue. The meetings will be held in Asia and Europe and the issue would be subject to market conditions. Bank ABC, Dubai Islamic Bank, Emirates NBD Capital, HSBC, KFH Capital, Maybank, Noor Bank, QNB Capital and Standard Chartered will arrange the meetings.

Fitch: Index move boosts #sukuk; frameworks & standards still key

According to Fitch Ratings the inclusion of sukuk in major bond indexes would be a significant boost for the product, but initiatives to harmonise standards and improve transparency remain key to its long-term development. Reuters reported that JP Morgan would include eight sovereign and corporate sukuk in various bond indexes from 31 October. This may encourage issuers to supply index-eligible sukuk and support secondary market liquidity. However, Fitch Ratings believes the sukuk market's growth rate will be determined by two factors. Firstly, product-specific initiatives around regulation of sukuk issuance, which have been noteable in some jurisdictions, but have not always been harmonised across jurisdictions. Secondly, the broader attempts to deepen the investor base and improve transparency in the relevant capital markets. Sukuk issuance from key markets in 1H16 rose 11% from a year earlier to USD21.74bn, representing 30% of total issuance. Overall, Fitch expects this year's sukuk issuance to at least match 2015 issuance of around USD32bn.

Return of the Socially Useful #Sukuk is a Wake Up Call to a Lost Islamic Finance Industry

After a string of sukuk issued for purposes of liquidity, Senegal’s recent sukuk bought a welcome return to an Islamic finance transaction for the purposes of social good. Senegal closed its sukuk in late July, marking its second sovereign sukuk issuance. The West African nation will use the proceeds of the CFA 150 billion transaction to finance a drinking water supply program and an implementation program of road network and street lighting. The International Finance Facility for Immunisation (IFFIm) sells bonds on the capital markets to raise funds to save children’s lives. IFFIm has so far issued two sukuk with a December 2014 transaction for $500 million and a September 2015 transaction for $200 million. The International Finance Corporation (IFC) issued a five-year Sukuk in 2015 which was used to support IFC’s developmental financing activities in the Middle East and North Africa. Mahmoud Mohieldin of the World Bank Group said the group planned the issuance of an inaugural humanitarian sukuk program.

Shahjalal Bank to issue #bond worth Tk 4.0b

The board of directors of Shahjalal Islami Bank has approved for issuance of Mudaraba Subordinated Bond worth Tk 4.0 billion. The new issuance is part of a process of inclusion in Tier-II Capital for a period of 7 years through private placement. The bond issue is subject to approval of the regulatory authorities – Bangladesh Bank, Bangladesh Securities and Exchange Commission. The bank’s paid-up capital is Tk 7,346.88 million and authorised capital is Tk 10,000 million, while total number of securities is 734,688,133.

JPMorgan adds Islamic bonds to emerging markets indices

JPMorgan will include sukuk in its emerging markets indices starting from October 31. Dollar-denominated sukuk from Turkey, Malaysia and Indonesia will be included in JPMorgan’s flagship EMBI Global Diversified index, against which an estimated $313 billion in assets is benchmarked. The move could help sukuk break away from their traditional buy-and-hold investor base. Pakistan’s $1 billion sukuk maturing in 2019 will be included in the JPMorgan Asia Credit Index alongside sukuk from Indonesia and Malaysia, but Qatar and Bahrain are currently absent. Only two corporate sukuk will be included in the JPMorgan Corporate Emerging Markets Bond Index: a 2023 sukuk from Dubai’s DP World and a 2024 sukuk from Saudi Electricity Co.

Islamic finance body IILM auctions first four-month #sukuk

#Malaysia-based International Islamic Liquidity Management Corp (IILM) has lengthened maturities in its Islamic bond programme by auctioning $500 million of four-month sukuk. Previously, the IILM has issued three-month and six-month papers, which were introduced to manage short-term funding needs. The IILM sold the four-month sukuk at a profit rate of 1.37389%, attracting 17 bids worth a combined $1.3 billion. It also sold $840 million of three-month sukuk at a profit rate of 1.24411%, attracting orders of $1.6 billion via 14 bids. The issues were bought by 11 primary dealer banks.

Ahli United Bank #Kuwait plans #sukuk issue of up to $200 mln

Ahli United Bank Kuwait has obtained approval from Kuwait's central bank to issue capital-boosting sukuk worth up to $200 million. The bank did not give a time frame for the issue but said it could include foreign and domestic currency tranches. The proceeds would be used to enhance the bank's capital base in line with Basel III global banking standards. Last year Kuwait's Capital Markets Authority released rules providing a legal basis for issuance of Islamic bonds, which is helping boost sales of sukuk. Kuwait's Gulf Bank and Boubyan Bank have both completed sukuk issues this year.

Under The Radar: #Sukuk Bonds Boom In West Africa

While Middle Eastern and Asian countries are leading the Islamic economy, Sub-Saharan Africa remains under-serviced. However, West Africa is seeing a marked uptick in Islamic finance, especially in the issuing of sukuk. Sukuk is increasingly being used to finance development projects, as well as to increase domestic capital reserves and financial inclusion. 2016 has seen a host of new sukuk issuances in West Africa. On August 10th, Togo’s initial CFA 150 billion ($263 million) sukuk offering closed. This comes after Senegal launched its second $263 million round at the end of June. As a result of sukuk’s unique traits, the IMF is promoting the regional adoption and inclusion of sukuk into African government debt strategies.

Fitch Updates Criteria for Rating #Sukuk

Fitch Ratings has updated its criteria for rating Sukuk, which replace the existing criteria published on 18 August 2015. Fitch's analytical assumption is that the structure of the sukuk and the underlying transaction provides for full recourse to the originator and the sukuk rating is driven solely by the originator's rating. It remains uncertain whether certificate holders will be able to enforce their contractual rights in local courts. Ratings assigned to sukuk do not imply any confirmation that the sukuk are sharia-compliant.

#Sukuk Market Key Players Abu Dhabi Islamic Bank, HSBC, Al Baraka Bank & Maybank Islamic Berhad Analysis Forecast 2020

Research analysts forecast the global sukuk market to grow at a CAGR of 8.51% during the period 2016-2020. The forecast has been prepared based on an in-depth market analysis with inputs from industry experts. To calculate the market size, the report considers the total revenue generated from the sukuk issuance primarily in the emerging markets such as Southeast Asia, Middle East, and rest of the world.

Fitch Assigns 'AAA(idn)' Ratings to Indosat Ooredoo's Bond, #Sukuk

Fitch Ratings #Indonesia has assigned National Long-Term Ratings of 'AAA(idn)' to Indosat Ooredoo's IDR 3,172 bn senior unsecured bonds and IDR 288 bn sukuk ijarah issues. The issues are launched from Indosat Ooredoo's IDR 9 trn bond programme and IDR 1 trn sukuk ijarah programme. Indosat Ooredoo will use the issue proceeds to refinance its existing rupiah debt, and to fund licence fees. The sukuk rating is at the same level as Indosat Ooredoo's National Long-Term Rating of 'AAA(idn)'. Fitch's rating for the certificates reflects the agency's belief that Indosat Ooredoo would stand behind its obligations.

#Ivory Coast returns to sovereign #sukuk market, after #Togo debut

Ivory Coast plans to complete a sale of 150 billion CFA francs ($263 million) worth of Islamic bonds, following Togo's debut sale of sovereign sukuk launched last month. The two West African nations join Senegal in tapping the market for sukuk, expanding the use of Islamic financing options outside the Middle East and Southeast Asia. The Ivory Coast will sell the 7-year sukuk using ijara with the subscription period closing on Aug. 31. This represents the second phase of a 300 billion CFA franc sukuk programme set up last year by the Ivory Coast. Togo plans to complete the sale of its sukuk later this week, aiming to raise 150 billion CFA franc with a 10-year maturity and a 6.5% yield. The lead arranger for both the Togo and Ivory Coast sukuk is the Islamic Corporation for the Development of the Private Sector (ICD).

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