Middle East Bonds

The Central Bank of Bahrain has sold BD36m ($95.4m) of its monthly sukuk salam with fewer orders than last month’s issue.

Luxembourg’s KBL Bankers returned as a primary dealer for the International Islamic Liquidity Management Corp’s seventh sukuk, as the company reissued its rolling $860m of three-month commercial paper on Thursday.

Luxembourg’s decision to issue its debut sukuk in euros seems to defy common sense, since it will be selling into a Gulf-dominated market where most investors are fixated on dollars. But the grand duchy is right to stick with the currency and sukuk market participants should welcome this unusual choice.

Turkey’s Alternatifbank opened books on a $250m five year bond on Tuesday. The starting spread offered what bankers away from the deal saw as a fair pick-up over Commercial Bank of Qatar, which is guaranteeing the notes.

Luxembourg’s decision to issue its debut sukuk in euros seems to defy common sense, since it will be selling into a Gulf-dominated market where most investors are fixated on dollars. But the grand duchy is right to stick with the currency and sukuk market participants should welcome this unusual choice.

The Central Bank of Bahrain has sold BD20m ($53m) of short-term sukuk al ijara with lower orders than last month’s issue.

Kuwait Energy has mandated Bank of America Merrill Lynch as the sole bookrunner for a Reg S dollar bond. The roadshow for the deal will start on July 15.

A dispute between shareholders of the Algerian subsidiary of Bahrain’s Al Salam has seen Algeria’s central bank commission place the bank under temporary administration.

Corporate and debutant issuers have driven Saudi sukuk to its busiest six months on record according to IFIS figures.

It is a fine testament to the growing stature of Islamic finance that various novel borrowers are pressing ahead to issue international sukuk for the first time — the likes of Hong Kong, Luxembourg and Dogus Group among them. But with so many debuts revving up to join an autumnal convoy, those that can beat the traffic are advised to do so.

European banks are so anxious to comply with US sanctions law that in some cases, they are interpreting the rules more strictly than US banks, and even occasionally losing business by it, several bankers said this week. Jon Hay and Michael Turner report.

Year to date CEEMEA sovereign bond volumes are at their highest level ever, with the total sold so far already soaring past some analysts’ full year predictions. Issuance is less than $20bn off the record set in 2012, and with Macedonia and Bahrain adding themselves to the list of CEE and African sovereign deals still expected, 2014 could easily become the new benchmark for sovereign supply, said analysts.