Abu Dhabi's Al Hilal Bank acquired $225MM RegS floating rate note Sukuk at 3mL+160bps under its $2.5 billion existing Trust Certificate Issuance Program. This trade marks the return to senior unsecured dollar Sukuk market since 2013 by an Abu Dhabi financial institution. CEO of Al Hilal Bank, Khaled Abdulla Alkhoori, said this was the first Islamic private placement in the UAE. The bank aims to work towards raising funding for medium term to enhance its funding profile.
Abu Dhabi government-owned Al Hilal Bank has raised $225 million by privately placing Islamic bonds. The issue, maturing in January 2019, was priced at the three-month London interbank offered rate plus 160 basis points. It was the first unsecured U.S. dollar sukuk issue by an Abu Dhabi bank since 2013. CEO Khaled Abdulla Alkhoori said the bank aims to work towards raising funding for the medium term to enhance their funding profile. The issue was the second tranche of the bank's $2.5 billion notes programme. In the first tranche, Al Hilal raised $500 million of five-year debt in 2013.
After the publication of Oman's new Sukuk Regulations on 5 April 2016 new listing categories have been introduced on the Muscat Securities Market (MSM). The Capital Market Authority (CMA) introduces a new "Bond and Sukuk Market" on the MSM. The CMA intends to have existing and future bonds and Sukuks listed on the MSM to be placed into this new category. A number of other new categories also being introduced, such as "Under Monitoring Market" and a "Rights Issue Market".
London Stock Exchange welcomes ICD to mark the listing of its MTN Programme and inaugural $300 million five year Sukuk. ICD will use the proceeds of the Sukuk to support investments in private sector projects. The MTN program, which is a Wakala structure, will serve as ICD’s main funding platform for regular issuance of Sukuk. HSBC was the arranger for the MTN Program and the syndicate group for the Sukuk included 13 international and regional banks.
The #Philippines’ incoming finance minister is looking at raising debt via sukuk bonds and yuan borrowings in a bid to diversify its debt profile. The Philippines last went to the debt market in February selling $2bn of 25-year bonds. Minister Carlos Dominguez is also planning to impose new taxes on more unhealthy products to compensate for a planned cut in income taxes. He also said he would put casinos under an anti-money laundering legislation to avoid a repeat of the Bangladesh Bank heist. Dominguez is returning to the Cabinet after 27 years and will assume office on June 30.
Bank Al Jazira has priced a 2 billion riyal ($533 million) sukuk issue that will boost the lender’s capital reserves. The bank priced the transaction at 190 basis points over the six-month Saudi interbank offered rate. The Islamic bond issue is structured with a ten-year lifespan but includes an option for the lender to redeem the sukuk after five years. It was arranged by GIB Capital as well as the bank’s own investment banking arm.
Turkey is issuing $1 billion dollar-denominated sukuk after a 18-month absence from the Islamic finance market. The government is offering five-year notes at 290 basis points above the midswap rate, aiming to sell debt before the Federal Reserve acts on its stated intention to increase interest rates. Turkey has already raised $3 billion in capital markets this year, completing two-thirds of its planned borrowing program for 2016. Turkish government debt is rated Baa3 at Moody’s Investors Service, the lowest investment grade.
Kuwait's Boubyan Bank issued $250 million Perpetual Tier 1 Capital Certificates, completed May 16, the first public sukuk from a Kuwaiti bank, the first public sukuk out of Kuwait since 2007 and the world’s first public fully Basel III-compliant Tier 1 sukuk. The certificates were made available on the Irish Stock Exchange and NASDAQ Dubai. The issuance was advised by Dentons. Joint coordinators included Standard Chartered, HSBC and Boubyan, Emirates NBD Capital, Dubai Islamic Bank, KFH Capital and National Bank of Kuwait. Co-managers of the transaction were Abu Dhabi Islamic Bank, Ajman Bank and Noor Bank.
In the USD sukuk pipeline, DP World and Noor Bank have selected banks for a possible benchmark issuance. Turkey’s Deputy Prime Minister Mehmet Simsek mentioned plans of an issuance within 1H16. Bloomberg Malaysia Sukuk Ex-MYR Total Return (BMSXMTR) and Dow Jones Sukuk Total Return (DJSUKTXR) indices closed lower at 103.55 (-0.26%) and 159.18 (-0.44%) respectively. Malaysia’s revenue fell slightly to MYR1.54bn (-0.7%) in 2015 while income tax revenue increased by 7.8%. Turkey's unemployment rate declined to 10.9% and its government budget balance improved to TRY5.36bn in April. Indonesia’s trade balance rose to USD667m in April mainly due to the larger than expected decline in imports.
Several Omani private firms are keen to raise funds by way of sukuk after Mohammed Al Barwani Holding received approval for a OMR58 million-issue. The companies interested in issuing sukuk can avail tax concession if the special purpose vehicle for sukuk issue is registered in Oman and the issue is floated in the local market. Mohammed Al Barwani Holding's sukuk issue opened subscription on Monday either in Omani rial or dollar. So far, Oman witnessed only two sukuk issues that raised a total of OMR300 million, OMR50 million from real estate development firm Tilal Development Company and the other one a OMR250 million sovereign sukuk issue.
Islamic banking in #Uganda will broaden government financing options and will ease its borrowing from the private sector, through the Sukuk bonds. According to the managing director of ABL Dunamis, Abubaker Mayanja, Sukuk funding will be available for government infrastructure projects; as long as they meet sharia requirements and the funds are invested directly into the project. He said the bonds will be issued by all commercial banks, regardless of whether they are Muslim founded or not.
Emirates Islamic Bank has launched the sale of $750 million in sukuk with five years duration. Pricing for the instrument has been set at 220 basis points over midswaps after attracting orders from investors worth more than $2.2 billion. The pricing is tighter than the 225 bps over the same benchmark indicated earlier in the day, and well inside initial guidance of the 240 bps area. The issuance was arranged by Standard Chartered, Al Hilal Bank, Bank ABC, Dubai Islamic Bank, HSBC, Maybank and Noor Bank.
Noor Bank has successfully priced its debut perpetual $500 million Tier 1 capital issuance, the first issuance from UAE in 2016. The final pricing came on the back of global roadshows across Middle East, Asia and Europe with an order book crossing over $1 billion. Citi and Standard Chartered were the joint global coordinators for the issuance, whilst Dubai Islamic Bank, Emirates NBD Capital, First Gulf Bank, Noor Bank and Sharjah Islamic Bank acted as the joint lead managers for the issuance.
Malaysia's Bank Muamalat will set up a 1 bn ringgit ($243.4 mn) sukuk programme after redeeming 400 mn ringgit worth of subordinated sukuk on June 15. Bank Muamalat's new sukuk programme has loss-absorption features to meet Basel III criteria, qualifying as Tier 2 capital. In February, Bank Muamalat and Malaysia Building Society called off merger talks that would have created one of the country's largest standalone Islamic banks.
The Indonesian government is considering cutting the levy to zero for all local-currency sovereign bonds from 15% for domestic investors and 20% for international ones. According to Abas A. Jalil, CEO of Amanah Capital Group, the zero tax will definitely encourage more participation by government funds in the Indonesian sukuk market. The proposal aims to revive Islamic banking after the industry shrank to 3.5% of total financial assets in March, from 5% a year earlier. Only one Indonesian company has issued rupiah sukuk in 2016 for the equivalent of $7.3 mn compared with $5.9 bn worth of ringgit sales in Malaysia, the biggest Shariah-compliant debt market.
Sharjah Islamic Bank (SIB) has successfully repaid a $400 million sukuk. The sukuk had been raised in May 2011 under challenging market circumstances. The funds raised under the sukuk were used for general corporate purposes and business expansion of SIB. The bank currently has two sukuks of $500 million outstanding which are set to mature in 2018 and 2020 respectively.
DP World has raised $1.2 billion in a new seven-year sukuk which is set to be listed on Nasdaq Dubai. The issue received strong investor interest and was 2x oversubscribed receiving more than $2bn in bids. The new sukuk is priced at a fixed coupon rate of 3.91% maturing in 2023, replacing over $1.1bn of the 2017 6.25% coupon sukuk. Sultan Ahmed bin Sulayem, Group Chairman and CEO of DP World said Nasdaq Dubai gives this new listing global visibility to position Dubai as the capital of the Islamic economy globally.
Turkish participation bank Kuveyt Turk has raised 300 million lira ($101.5 million) of Islamic bonds, and plans to regularly use public sales in the future. The 6-month deal is the largest local currency sukuk issued by Kuveyt Turk. The bank opted for a public sale to further widen its funding sources, in contrast to most other sukuk deals which are sold via private placements. Last week, the Turkish treasury mandated banks for a sovereign sukuk deal in the international markets. First, Turkiye Finans Katilim Bankasi applied to raise as much as 17 million euros via sukuk, followed by Aktif Bank who has also applied to raise up to 100 million lira via sukuk.
Kuwait Finance House Turkey has realized a sukuk issuance of 300 million TL with tenure of 179 days, exceeding its own previous record breaking sukuk issuance of TL 200 million on Nov 13, 2015. According to CEO Ufuk Uyan the bank will continue similar public offerings in the future. The first lease yield shall be made on Aug 11, 2016, while the second on Nov 8, 2016 at the end of the maturity, together with principal sums. So far, KFH-Turkey has issued lease certificates of a total of TL 7,2 billion in domestic and overseas markets.
Dentons advised #Kuwait's Boubyan Bank on its issuance of $250 million Perpetual Tier one Capital Certificates, which completed on 16 May 2016. The transaction represents the world's first public fully Basel III-compliant Tier one Sukuk, while also being the first ever public Sukuk from a Kuwaiti bank, and the first public Sukuk out of Kuwait since 2007. Standard Chartered Bank, HSBC and Boubyan Capital acted as joint global co-ordinators, together with Emirates NBD Capital, Dubai Islamic Bank, KFH Capital and National Bank of Kuwait as joint lead managers on the issuance of the Capital Certificates. Abu Dhabi Islamic Bank, Ajman Bank and Noor Bank acted as co-managers.