IslamicFinance.de

The government plans to sell up to Rp 5 trillion (USD 485 mn) of Sukuk, to institutional investors in the domestic market by the end of the second quarter.

Hashem Kalantari reported in Forbes that Iran plans to issue USD 12.3 bn of foreign currency and rial-denominated bonds over the next three years to help finance the development of its major South Pars gas field in the Gulf.

Indonesian shipping firm, PT Berlian Laju Tanker Tbk , in a prospectus published in Bisnis Indonesia newspaper, the firm said it plans to sell 400 billion rupiah of conventional bonds and 100 billion rupiah of ijarah sale-and-leaseback sukuk, which will be offered May 20-25.

It has appointed PT Danatama Makmur and PT Andalan Artha Advisindo Sekuritas as underwriters.

Sukuk sales in Asian currencies may jump in the next 6 months as companies compare borrowing costs and investors become more willing to accept risk in addition to favorable USD versus local currency credit spreads, according to CIMB.

The debt market in the Middle East and North Africa (Mena) has the potential to grow to $USD 1.6 trillion p.a. but currently remains in its nascent stage, according to economic experts speaking at an event organised by the Dubai International Financial Centre (DIFC). Debt securities form just 3 % of of the Mena capital markets, while global capital markets have a ratio of 42 %.

Press Release

LONDON (Standard & Poor's) May 22, 2009--Standard & Poor's Ratings Services said today that it revised to negative from stable its outlook on Saudi Arabia-based Saad Group and related entities, owing to our view of its increased real estate exposure resulting in the reduced liquidity and geographic diversity of its portfolio. At the same time, the 'BBB+/A-2' corporate credit ratings were affirmed.

The outlook revision reflects our view of Saad Group's reduced portfolio liquidity and diversity, with real estate holdings in Saudi Arabia constituting a substantially larger portion of Saad Group's asset base than previously. Due in part to current economic conditions, we are applying more conservative metrics for Saad Group's ratings, by altering our previous treatment of some of Saad Group's assets and liabilities. We also lowered our loan-to-value (LTV) threshold for the rating to 25% from 30%.

The UK government could turn to Islamic investors to finance part of its debt if market conditions improve, Business Minister Ian Pearson told Reuters in an interview wrote Cecilia Valente.

The UK government was expected to announce an Islamic-compliant short-term debt programme of up to 2 billion pounds ($3.03 billion), but in November the pre-budget report shelved the plans, citing deteriorating markets.

The contemporary definition on organized tawarruq is: when a person (mustawriq) buys a merchandise from a local or international market on deferred price basis. The financier arranges the sale agreement either himself or through his agent. Simultaneously, the mustawriq and the financier executes the transactions, usually at a lower spot price.

It is not permissible to execute both tawarruq (organised and reversed) because simultaneous transactions occurs between the financier and the mustawriq, whether it is done explicitly or implicitly or based on common practice, in exchange for a financial obligation.

Full text: English and Arabic at the link below.

The Dubai Financial Market has finalised comprehensive standards to be established for the issuance of Sukuk and awaiting approval of authorities.

Dubai’s Nakheel receives bail-out cash, but the amount is not disclosed, reported Simeon Kerr in the Financial Times; it is also said that Nakheel was restructuring some payment plans with suppliers.

Contractors say developers such as Nakheel have started to honour some – but not all – payments, after months of delay.

The new yearbook includes Standard & Poor’s latest analysis and rating methodologies on almost 40 rated Islamic debt issues and issuers, and an overview of its suite of global benchmark and investable Sharia indices.

While total global sukuk issuance more than halved to $14.9 billion in 2008 from $34 billion in the previous year, Standard & Poor’s believes the outlook for Islamic finance remains strong. Sharia-compliant assets now total about $700 billion after growth exceeding 10% annually during the past decade.

Full 70+ pages report for free download at:

http://www.gcc.standardandpoors.com/islamic_finance/Islamic%20Finance%20Outlook%202009%20(12).pdf

Dubai Islamic Bank offered to buy back up to USD 200 mn of sukuk. Pricing shall be at least 86 % of face value, but not more than 90 % determined by an auction.

Dubai Islamic has USD 750 mn of sukuk due 2012.

Saudi Arabia’s Islamic Development Bank (IDB), plans to sell USD 500 mn Sukuk by end of June, reported Shanty Nambiar on Bloomberg. The Jeddah-based bank plans to raise as much as USD 5 bn over the next 5 years through 2014 to fund the bank's projects in member countries.

IDB also plans to start a new USD 1.5 bn to USD 2 bn infrastructure fund funded by public and privat sector as joint investors.

Sara Hamdan reported on The National that market participants interviewed seeing the Gulf Corporate bond sales to grow, specifically as recent sovereign issues have completed a yield curve previously not avalaibe to benchmark against.

In the coming weeks, Malta will be explored by a large institution for its potential to the introduction of the Sukuk

Any organisation interested in participating in an information session being organised with the visiting institution or in having one to one meetings are invited to send an email to Reuben Buttigieg on rbuttigieg@maltamanagement.com

Dubai real estate developer Deyaar will launch a series of funds of up to AED 1 bn to buy distressed debt, including its own, as it looks to boost returns for shareholders, reports John Irish on Reuters.

Its first AED 500 million fund is about 60-70 % subscribed by a mix of local and overseas investors and would buy back properties on which investors have defaulted from Deyaar's own portfolio according to the CEO, Giebel.

Deyaar will rent out the units to provide cash flow for the company before selling them once the Dubai property market recovers.

The UAE’s two largest Islamic home finance companies will need to secure adequate funding before they can re-start lending, the chairman of Tamweel. Both firms have been funded by banks on short term maturities, a business model, which does no longer work.

Malaysia's retail Sukuk was a success and oversubscribed, now a second tranche is in preparation.

New sales of Islamic bonds or sukuk, by Asian governments such as Indonesia are revitalising the market, ratings agency Moody’s said in a report, wrote Uta Harnischfeger in The National. Last week, the government of Indonesia issued its first international dollar sukuk, raising US$650 million (Dh2.3bn). The Sukuk was seven times oversubscribed.

Indonesia's forthcoming Global Sukuk has been assigned a foreign currency rating of Ba3 with a stable outlook by Moody's Investors Service.