Middle East Bonds

Al Hilal’s additional tier one perpetual sukuk drew big demand on Tuesday and set a template for further deals of its kind. Not everyone was convinced that the aggressive price compensated for what was essentially equity risk, but while the doubters may rue missing out this time, investors should carefully heed the warnings they have raised.

Albaraka Turk has priced $350m of five year sukuk at 6.25%, after drawing around $750m of orders. The Turkish participation bank previously indicated the deal would be benchmark size – typically $500m for international bonds, although sukuk arrangers sometimes use the term to describe smaller offerings.

United Arab Emirates bank Al Hilal has given initial price thoughts of 6% area on a benchmark tier one perpetual sukuk — the first Islamic deal of its kind since Dubai Islamic Bank brought $1bn in March last year.

Turkish participation bank Albaraka Turk (rated BB by Standard & Poor’s) has given initial price thoughts of low 6% area on a five year benchmark dollar sukuk.

United Arab Emirates bank Al Hilal has given initial price thoughts of 6% area on a benchmark tier one perpetual sukuk — the first Islamic deal of its kind since Dubai Islamic Bank brought $1bn in March last year.

Turkish conglomerate Doğuş Group looks set to become the first Turkish corporate borrower to issue a dollar sukuk, having applied to the country’s Capital Markets Board to issue up to $400m to foreign investors.

The Central Bank of Bahrain sold its BD36m ($95.5m) of short term sukuk al salam with more orders than last month’s issuance.

Saudi Arabia’s National Petrochemical Co (Petrochem) has sold SR1.2bn ($319.9m) in its debut sukuk, making it the busiest six month period ever for Saudi sukuk issuers according to IFIS figures.

United Arab Emirates bank Al Hilal tightened guidance on its benchmark tier one perpetual sukuk to 5.75% area and capped the size of the deal at $500m. The bank expects to price the deal, which is the first Islamic tier one out of the UAE since Dubai Islamic Bank brought $1bn in March last year, as early as Tuesday.

Turkish participation bank Albaraka Turk (rated BB by Standard & Poor’s) has given revised official guidance of 6.25% area on its five year benchmark sukuk, with pricing expected to follow on Tuesday.

Turkish banks pushed on apace with international funding drives this week, despite rising fears over Iraq knocking some froth off their recent strong rally. Isbank and Kuveyt Türk priced well with benchmark bonds and sukuk, while Albaraka Türk completed its sukuk meetings and Ziraat Bankasi announced plans to go on the road with a long-awaited inaugural dollar deal.

This week’s CEEMEA and Latin American bond deals were trading up across the board on Friday, regardless of whether they offered chunky or non-existent new issue concessions, reports GlobalCapital. And while relative value rather than fundamentals drive investors’ decisions, the emerging market rally is only going to run and run, said bankers.