IslamicFinance.de

DIFC Investments, the investment arm of Dubai’s financial free zone, has set final guidance for a $700 million (Dh2.57 billion) 10-year sukuk in the range of 185 to 190 basis points (bps) over midswaps on Tuesday, according to lead arrangers. Pricing has tightened with investor orders topping $3 billion, lead arrangers said. Earlier on Tuesday, the sukuk had been marked at 195 bps plus or minus 5 bps over midswaps. On Monday, it was marked initially at the very low 200s over the same benchmark. Dubai Islamic Bank, Emirates NBD, Noor Bank and Standard Chartered are arranging the sale.

DIFC Investments, the investment arm of the company running Dubai’s financial free zone, is reportedly planning to issue sukuk. The company has appointed banks and could come to market as early as September. Key banks on a 2012 loan deal are among those involved in the new sukuk. DIFC took out a $1 billion syndicated loan in May 2012 with Emirates NBD acting as financial adviser, while Standard Chartered coordinated the debt. Dubai Islamic Bank and Noor Bank also participated in the loan. The purpose of that loan was to refinance a $1.2 billion FRN sukuk that was maturing later that year. The new sukuk, if successful, could be used to refinance that 2012 loan.

Moody's Investors Service said on Monday the Dubai's government's USD 20 bn 5-year, 4 % bond programme could support debt ratings of Dubai companies that were placed under review for a downgrade earlier this month. If there are no restrictions on how Dubai uses bond proceeds this could support Moody's ratings of Emaar, DP World, DIFC Investments, Dubai Holding Commercial Operations Group, Dubai Electricity and Water Authority and the Jebel Ali Free Zone. Moody's had said it could lower its debt and Islamic bond, or sukuk, ratings for the six firms, all linked to the Dubai government, by as much as two notches each. The review is due shortly.