Middle East Bonds
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It is a fine testament to the growing stature of the Islamic finance market that various novel borrowers are pressing ahead with plans to issue international sukuk for the first time — the likes of Hong Kong, Luxembourg and Dogus Group among them. But with so many debut deals revving up to join an autumnal convoy, those that can beat the traffic are advised to do so. -
The government of Sharjah, the United Arab Emirates’ third biggest economy, will issue its first ever sovereign sukuk in September or October, according to market rumours and a banker with knowledge of the matter.
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It is a fine testament to the growing stature of the Islamic finance market that various novel borrowers are pressing ahead with plans to issue international sukuk for the first time — the likes of Hong Kong, Luxembourg and Dogus Group among them. But with so many debut deals revving up to join an autumnal convoy, those that can beat the traffic are advised to do so.
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Overall CEEMEA supply this year may be down almost $25bn on the same time in 2013, but second quarter issuance was only slightly shy of the total sold over the same period last year. The healthy pick-up in issuance allowed some bookrunners — including Deutsche and HSBC — to redress a sluggish start to the year but the top trio of Citi, JP Morgan and Barclays remained in place.
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Garanti Bank sold a €500m five year bond on Tuesday in line with initial price thoughts — an unusual event in CEEMEA where pricing is typically tightened. But a syndicate official on the note said he was pleased with the result, and one away from the deal said Garanti’s generosity may have been necessary after a string of Turkish bank deals in the last month.
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Sukuk issuance has passed last year’s first half total after a busy second quarter compensated for a slow start to the year. The volumes were aided by a rare international perpetual sukuk from Al Hilal and the United Kingdom government’s debut deal, both placed in the last week before Ramadan.
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Insurance company XL Group has extended its support for Cobalt Underwriting, a Shariah compliant managing general agency, with cover for financial lines products spanning financial institutions, professional indemnity and managing liability.
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The final push to issue bonds and sukuk before the start of Ramadan next week saw Albaraka Turk price $350m of five year sukuk this week, capping off a run of dollar sukuk and Turkish deals in June.
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United Arab Emirates bank Al Hilal reopened the region’s dollar tier one market this week with an aggressively priced debut $500m perpetual sukuk — the first of its kind in the market for over a year, and at one of the tightest ever yields.
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Turkiye Finans has issued a five year MR800m ($249m) sukuk as the first tranche of a MR3bn sukuk programme, making it the first Turkish participation bank to borrow in the ringgit market.
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Tunisia has upgraded its local currency sukuk plans this summer and instead will begin preliminary meetings with international investors at the end of August to discuss a debut sovereign dollar deal.
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