Middle East Bonds

Senior Egyptian government officials and advisers on Thursday strove to present a united front on the country’s sovereign sukuk plans, following a week of intense debate over Shariah compliance and use of national assets.

Manama, Bahrain –18 December 2012 – The Central Bank of Bahrain (CBB) announces that the monthly issue of the short-term Islamic leasing bonds, Sukuk Al-Ijara, has been subscribed by 100%.

Nakheel Properties looks to be on course to make a Dh201m ($54.8m) payment on Saturday to holders of one its sukuk. The Dubai-based company, which was hit hard during the Middle East financial crisis, said on Wednesday that it has made the necessary arrangements to enable its paying agent Deutsche Bank to make the third profit payment on the notes.

Global sukuk issuance in 2012 has reached $138.5bn, according to the IFIS Sukuk Database, with a run of Asian deals this month taking the market further into record territory. The running total is 49% up on the $93bn issued throughout the whole of 2011.

Dana Gas completed a $920m sukuk restructuring with creditors this week, having defaulted on the notes in early November. The Sharjah-based company will pay down $70m in cash and issue two new $425m five year sukuk — one ordinary and one convertible — paying 9% and 7%, respectively. The previous deal’s coupon was 7.5%.

Dana Gas has received $48m of overdue liquid fuel payments from Iraqi Kurdistan. Difficulties in obtaining money that the Sharjah-based company is owed for its operations in Kurdistan and Egypt were a key contributing factor to its failure to pay on a $920m sukuk that matured at the end of October.

Bahrain’s Gulf International Bank underscored its improving fortunes under Saudi ownership this week with a tightly priced but well received $500m five year bond.

Gulf International Bank looks set to make a tightly priced return to the debt capital markets next week with a benchmark-sized dollar bond. Investors in the region expect a deal with a five year maturity that could be $750m-$1bn, while pricing could begin around 175bp-200bp over mid-swaps.

Dana Gas, the Abu Dhabi-listed firm that failed to pay a $1bn sukuk maturity in early November, hopes to announce a lock-up agreement and sign headline terms of a restructuring with creditors.

QInvest chief executive Shahzad Shabaz, who has led the Qatari investment bank since its inception in 2007, resigned from his role on Wednesday. He will remain at the firm for a period to help the transition to his replacement, deputy CEO Tanim Hamad Al-Kawari.

Manama, Bahrain – 22 November 2012 – The Central Bank of Bahrain (CBB) announces that the monthly issue of the Sukuk Al-Salam Islamic securities for the BD18 million issue, which carries a maturity of 91 days, has been oversubscribed by 278%.

International legal practice Norton Rose has advised the Republic of Indonesia for a second time on another large scale international sukuk issuance. The firm advised the Republic of Indonesia on the establishment of a US$3 billion sukuk issuance program and the initial issuance of US$1 billion of sukuk under the program. The issuance, which closed on November 21, 2012, has a maturity of ten years, with periodic distributions of 3.3% per annum. The issuance was governed by English laws and was offered under Rule 144A and Regulation S of the US Securities Act to a broad range of investors based inside and outside the US.