Sukuk

International Islamic Liquidity Management Corporation issues $1.06bn #sukuk

The Malaysia-based International Islamic Liquidity Management Corporation (IILM) successfully conducted an auction for a total issuance of $1.06bn short-term A-1 rated Sukuk in three series. The three series have been priced by the market as follows: USD400m of 1-month tenor at 0.33%; USD460m of 3-month tenor at 0.45%; and USD 200m of 7-month tenor at 0,58%, respectively. The tender resulted in significant demand from Middle Eastern, Asian and African investors, with an orderbook that closed in excess of USD1.72bn. ILM is an international organisation established by various central banks to develop and issue short-term Shari’ah-compliant financial instruments. The current members of the IILM Governing Board are the central banks and monetary agencies of Indonesia, Qatar, Kuwait, Luxembourg, Malaysia, Mauritius, Nigeria, Turkey, the UAE, as well as the multilateral Islamic Corporation for the Development of the Private Sector.

Source: 

https://www.thepeninsulaqatar.com/article/12/08/2020/International-Islamic-Liquidity-Management-Corporation-issues-$1.06bn-sukuk

Moody's - Decline in #sukuk issuance to be limited by GCC financing needs

Moody’s expects sukuk issuance to modestly decline by 5% this year to about $170 billion because of the coronavirus crisis. Despite the decline, 2020 will still see the second highest sukuk issuance total ever, following a 36% increase in 2019. Total issuance in the first six months of 2020 dropped to $77 billion, down 12% from the same period last year, as activity in Malaysia and Indonesia flagged. Issuance in southeast Asia dropped by 25%, while volumes in the Middle East rose 7%. Volumes are likely to rebound in the second half of 2020, as governments raise money to finance their responses to the coronavirus crisis.

#Sukuk Market Developing Fastest in #Saudi Arabia

Launched in 2017 with the aim to diversify funding, the Saudi finance ministry had planned to raise US$31.5 billion of Sukuk in 2019. A new ‘primary dealer’ scheme for local-currency government sukuk was launched in 2018, under which five local banks buy the sukuk directly from the government and then make a market by quoting two-way prices to other investors. Additionally, Saudi regulators introduced a number of incentives in 2019 for corporate sukuk issuers and investors to encourage further issuances. Lower regulator fees and zero tax/zakat on investments in domestic sovereign sukuk also promise a more active and liquid secondary market.

Sukuk Issuance Cross $1 Trillion Mark

Since the issuance of the first modern sukuk in 1996, cumulative issuance of sukuk has crossed the US$ 1 trillion mark. As of the end of 2018, outstanding sukuk were valued at US$ 469.7 billion across 2,887 sukuk. The Saudi and Malaysian governments were the largest issuers in 2018, at US$ 17.1 billion and US$ 13.9 billion. Malaysia maintained its lead position in terms of issuances, boosted by the return of short-term murabaha sukuk from Bank Negara Malaysia. The central bank resumed sukuk issuances after a three-year hiatus. It issued US$16.1 billion in shortterm sukuk during the second half of 2018.

Une deuxième émission de #sukuk se prépare en #Egypte

Sarwa Capital finalise une opération évaluée à 152,2 millions $. Ce sera la deuxième émission de ce type de produits financiers sur le marché financier égyptien après celle de Talaat Mostafa Holdings en avril 2020. Sarwa Capital est aussi en train de mener des discussions avec de potentiels arrangeurs et garants de l'opération. Pour l'heure, seules deux entreprises financières égyptiennes sont habilitées à émettre des sukuk. Il s'agit de Sarwa Capital et EFG Hermes. Celle-ci est cotée sur la Bourse du Caire.

Islamic Development Bank Deploys #Sukuk to Counter Corona Impact

The Islamic Development Bank Group (IsDB) set aside $2.3 billion for its Strategic Preparedness and Response Programme for its member countries to tackle the economic fallout of the corona pandemic. OIC member states may partake in Digital Country Presentations, a new global gateway that offers investors, governments, and institutions an overview of upcoming trade and investment opportunities. SMEs can open a virtual 'stall' on Made in Series, an open platform that enables smaller businesses to present products, projects, and services to a global audience. Earlier this month, the IsDB issued its first-ever sustainability sukuk for social projects. According to Group President Dr. Bandar Hajjar, the latest sukuk placement allows the IsDB to tackle the aftermath of the pandemic with strong interventions in affected countries and sectors.

Global #sukuk market: A window of opportunity is opening

According to S&P Global Ratings, total sukuk issuance volume for the full year 2020 will be lower than in 2019. Central banks have already taken measures to boost banks' liquidity in core Islamic finance countries, so they are unlikely to issue sukuk this year. They want banks' increased liquidity to reach corporates, thereby minimizing the risk of a long-lasting economic downturn. The difficult economic environment has led to higher financing needs for sovereigns, but most of them are turning to conventional markets due to the complexity of issuing sukuk. The number of defaults among sukuk issuers with low credit quality will likely increase, which will serve to test the robustness of legal documents for sukuk.

S&P Global expects #sukuk issuance to touch $100bn in 2020

Sukuk issuance volume is expected to total around $100bn for 2020, about 40% lower than in 2019. The issuance volume fell 27% in the first six months of this year. S&P Global Ratings noted the number of defaults among sukuk issuers with low credit quality will likely increase, which will serve to test the robustness of legal documents for sukuk. Also, some sukuk may be issued to tackle social issues as economies recover, rather than solely to serve investors' financial interests.

My Say: Financing Covid-19 stimulus packages with GDP-linked #sukuk

The fiscal cost of fighting the economic fallout of the pandemic has been great for each nation. Many governments have already pledged billions in grants to support fiscal stimulus packages. Through moratoriums and debt relief programmes, capital that would have otherwise been used to pare down debts will instead be utilised by vulnerable groups and SMEs to support their expenditures in times of reduced income. These expenditures will in turn contribute towards GDP growth, save jobs and limit unemployment. But in order to do so, governments have to dig deep into their reserves. GDP-linked sukuk is one way to convert debts into equity repayments based on the GDP performance of the country. GDP-indexed securities can be viewed as desirable vehicles for international risk sharing and for avoiding the disruptions arising from formal default.

Sharjah Islamic Bank lists USD500m #Sukuk on Nasdaq Dubai

A USD500 million Sukuk has been listed by Sharjah Islamic Bank (SIB) on Nasdaq Dubai. The capital raised will support SIB’s activities and strategic development. The five-year Sukuk was subscribed 7.2 times by regional and international investors with 150 investors showing their interest. It brings the total value of SIB Sukuk listings on Nasdaq Dubai to USD2 billion following listings of 500 million US dollars each in 2016, 2018 and 2019. SIB’s latest USD500 million Sukuk listed on Nasdaq Dubai on 23rd June 2020.

Dubai Islamic Bank expected to sell over $200 mln in tap of 2026 #sukuk - document

Dubai Islamic Bank is expected to sell more than $200 million of its existing sukuk issuance due in 2026. The bank set final price guidance at 240-245 basis points over midswaps, tightening from initial price guidance of around 250 bps. DIB received more than $500 million in orders for the deal.

NBB diversifies its Murabaha service to clients by offering #Sukuk-based #Murabaha facility

The National Bank of Bahrain (NBB) announced its subscription to Bahrain Bourse’s newly introduced Murabaha service, which will be used by the Bank when transacting in Islamic Commodity Murabaha financing. NBB is one of the first banks in the Kingdom to execute a transaction using the new fully Shari’ah compliant service. The service employs Government of Bahrain Islamic Ijara Sukuk, whereby the lender in the financing transaction buys the Sukuk from the CBB and after the transfer of the ownership, sells them to the borrower, with a deferred sell as the underlying commodity.

DP World hires banks for perpetual Islamic bonds - document

Dubai-based port operator DP World has hired a group of banks for a potential sale of perpetual U.S. dollar-denominated sukuk. Citi, Deutsche Bank and JPMorgan will arrange investor calls in Asia, the Middle East and Europe, to be followed by the issuance of perpetual U.S. dollar-denominated Islamic bonds non-callable for 5-1/2 years. Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, Crédit Agricole, Samba Financial Group, Scotiabank and Standard Chartered Bank are also working on the deal.

#Indonesia issues $2.5 bln global #sukuk including $750 mln green tranche

The government of Indonesia issued $2.5 billion in wakalah global sukuk in three tranches. The 5-year paper of $750 million was sold as a green sukuk, while the other two tranches consisted of a 10-year tenor of $1 billion, and a 30-year maturity of $750 million. The sale was welcomed by investors with an order book that reached $16.66 billion, nearly 6.7 times the target amount. This global sukuk will be listed on the Singapore Stock Exchange and NASDAQ Dubai and the settlement will be carried out on June 23, 2020, with yields of 2.30% for the 5-year tenor, 2.80% for the 10-year tenor and 3.80% for the 30-year tenor.

Al Baraka signs #sukuk trading deal with BHB

Al Baraka Islamic Bank and Bahrain Bourse (BHB) have signed an agreement allowing the bank to buy and sell Sharia-complaint ijara sukuk through the exchange. Proceeds from the sukuk will contribute to facilitating the bank’s financing operations for its underlying clients. The agreement aims to diversify the commodities available for underlying clients when conducting a commodity-based murabaha transaction to include government-based sukuk issued by the Central Bank of Bahrain.

Sharjah Islamic Bank hires banks for dollar #sukuk, document shows

Sharjah Islamic Bank has hired a group of banks to arrange a global investor call ahead of a potential issuance of five-year U.S. dollar-denominated sukuk. The bank hired Standard Chartered, Bank ABC, Citi, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, the Islamic Corporation for the Development of the Private Sector, KFH Capital and Mashreqbank to arrange the call.

#Indonesia raises $681.74mln from Islamic bonds auction, above target

Indonesia raised 9.5 trillion rupiah ($681.74 million) from sukuk, more than the indicative target of 7 trillion rupiah. The weighted average yields for the sukuk sold on Tuesday were lower than comparable notes sold at the previous auction on May 18. Incoming bids reached 28.64 trillion rupiah, compared to 18.85 trillion rupiah in the previous auction.

Meezan bank completes issuance of Rs200 billion energy #sukuk

Meezan Bank concluded the issuance of Pakistan Energy Sukuk (PES) II worth approximately Rs 200 billion by state-owned Power Holding Limited (PHL). The Sukuk aims to help the Government in addressing the challenges for resolving circular debt in the country’s power sector. This is the second issuance of this series of sukuk, bringing the total size of the sukuk to approximately Rs400 billion. The sukuk issue was 1.7 times oversubscribed. The transaction is structured for ten years, with six monthly profit (rental) payments at a rate equivalent to 6 Month KIBOR -10 bps, as determined through the book building process.

Dubai Islamic Bank closes $1bn #sukuk

Dubai Islamic Bank (DIB) closed a $1 billion (Dh3.67bn) 5-year sukuk with a profit rate of 2.95%. The sukuk attracted more than 170 investors with the order book rising to over $4.5bn. The sukuk was issued as a drawdown under DIB’s $7.5bn Trust Certificate Issuance Programme, which is listed on Euronext Dublin and Nasdaq Dubai. It is the first public benchmark sukuk issuance from a regional financial institution after the Covid-19 outbreak. Bank ABC, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, ICBC, The Islamic Corporation for the Development of the Private Sector, KFH Capital, Sharjah Islamic Bank and Standard Chartered Bank acted as joint lead managers and bookrunners on this transaction.

Dubai Islamic Bank gives initial guidance for long 5-year dollar #sukuk - document

Dubai Islamic Bank (DIB) gave initial price guidance of around 280 basis points over midswaps for a planned issuance of long five-year dollar sukuk. On Monday, DIB hired a group of 10 banks to arrange a global investor call for the deal, which is expected to close on Tuesday.

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