Middle East Bonds

Banque Saudi Fransi’s SR2bn ($533.2m) Basel III compliant sukuk this week has taken Saudi Islamic bond issuance this year close to the levels reached in the first half of 2012, the industry’s high point.

The United Kingdom has pulled ahead decisively in the lop-sided race to issue the first Western sovereign sukuk, writes Dan Alderson. Tiny rival Luxembourg could only look on this week as UK borrowing officials roadshowed the groundbreaking offering across six Gulf and Asian money centres in three days — bolstering London’s bid for regional leadership in Islamic finance.

Commercial Bank of Qatar on Tuesday priced its first dollar deal in more than two years, flat to its existing curve, after attracting more than $3bn of demand.

National Bank of Ras Al-Khaimah (Rakbank) sold a $500m 3.25% five year bond at 160bp over mid-swaps on Tuesday afternoon, going straight from the initial guidance of 170bp area to pricing. Order books reached $1.6bn at their close.

Isbank priced the longest dated senior bond from a Turkish financial in nearly 18 months on Wednesday, pushing out to seven years for its dollar market return.

The UK’s Islamic banks have good grounds for fury at missing out on the UK sovereign sukuk mandate. But for their own sakes, they must keep faith that the deal is a dress rehearsal for something bigger, and turn up in size to buy the paper.

Turkish participation bank Kuveyt Turk has priced a $500m five year sukuk at 340bp over mid-swaps, the tight end of refined guidance, after drawing $3.25bn of orders.

Turkiye Is Bankasi (Isbank) opened books on a seven year dollar benchmark on Wednesday morning, while Ziraat Bankasi will start a roadshow over a year after mandating for a debut deal in the same currency.

National Bank of Ras Al-Khaimah (Rakbank) sold its $500m 3.25% five year bond at 160bp over mid-swaps on Tuesday afternoon, going straight from the initial guidance of 170bp area to pricing. Order books reached $1.6bn at their close.

Commercial Bank of Qatar priced its first dollar deal in more than two years flat to its existing curve on Tuesday after attracting more than $3bn of demand.

Kuveyt Turk gave initial price thoughts on Wednesday for a five-year dollar denominated sukuk at 375bp over mid-swaps. The Turkish participation bank plans to price $450m to $500m on Thursday, according to a banker on the deal.

The book for Commercial Bank of Qatar’s benchmark five year bond topped $3bn on Tuesday morning as price guidance was tightened to 117bp-120bp over mid-swaps. The deal will be priced in that range, said bankers.