Sharjah Islamic raises $500 m in sukuk sale



REUTERS

Published — Wednesday 10 April 2013

Last update 10 April 2013 1:41 am

| نسخة PDF Print News | A A

DUBAI: Sharjah Islamic Bank (SIB) sold a $500 million five-year Islamic bond at tighter pricing than initially indicated due to strong demand for sharia-compliant debt from the Gulf Arab region.
The sukuk, maturing in 2018, priced at par with a profit rate of 2.95 percent, at the lower end of the final guidance range of between 2.95 percent and 3 percent.
Islamic banks have stepped up sales of Shariah-compliant debt to meet their liquidity requirements and also to increase their capital reserves.
Demand for the sukuk was high, and the order book was over $2 billion when the official guidance was released.
SIB, rated BBB+ by Standard & Poor’s and Fitch Ratings, is 31-percent owned by the government of Sharjah, the third-largest emirate in the UAE. Kuwait Finance House (KFH) holds a 20 percent stake in the Islamic lender.
Its existing sukuk, a $ 400 million 4.715 percent issue maturing in 2016, was bid at 106.9 cents on the dollar, according to Thomson Reuters data, to yield 2.4 percent.
One trader said the new issue offered a negligible premium for a two-year extended maturity, and that this may lead to a weakening in secondary markets.
In recent bond and sukuk issues in the region, heavy bids caused pricing to tighten dramatically in the primary market, setting the bonds up to fall in the secondary market when it becomes clear that underlying demand for them at the final pricing is not as great as the order books suggested.
Proceeds from the sukuk are expected to be transferred to the bank through a special purpose vehicle, according to a company prospectus.
Abu Dhabi’s Al Hilal Bank, HSBC Holdings, Kuwait’s Liquidity Management House, a unit of KFH and Standard Chartered Plc are mandated lead arrangers on the sukuk.

What's happening around Saudi Arabia

RIYADH: The Ministry of Education (MoE) has allocated over 180 clinics for schools in Riyadh and directed all its departments across the Kingdom to recruit health advisers at schools with more than 100 students.Work has already started on introducing...
RIYADH: The Moroccan experience in desert tourism is largely similar to that of Saudi Arabia, which boasts of a unique diversity in culture in its different regions, Prince Sultan bin Salman, president of the Saudi Commission for Tourism and National...
JAZAN: Deputy Crown Prince Mohammed bin Salman visited the advanced field hospital of the Armed Forces in Jazan on Tuesday.He was reassured about the injured in the ongoing battle. He conveyed the greetings of Custodian of the Two Holy Mosques King S...
JEDDAH: The planned “North Thunder” military exercise is a clear message to Iran and the countries in the region it supports that any hostile intentions and actions will be firmly dealt with, an expert has said.The military drill is scheduled to be h...
RIYADH: Syrian conjoined twins will be separated at the King Abdullah Specialist Children’s Hospital at the King Abdul Aziz Medical City (KAMC) in Riyadh on Sunday.According to a KAMC spokesman, the forthcoming surgery will be the fourth and final st...
JEDDAH: Education Minister Ahmed Al-Issa has issued an order to establish a department for school security. It will be be linked organizationally to the general supervisor of school safety and security at the ministry.According to the decision, schoo...
JEDDAH: From delivering mails for Saudi Aramco to captaining Saudi Arabian Airlines’ first flight to New York, Jazza Al-Shammari’s career story is unique.“I started my career as a postman with Saudi Aramco in 1959 and continued the primary studies at...
RIYADH: A team of the King Faisal Specialist Hospital & Research Center (KFSHRC) has identified a gene responsible for cardiomyopathy.Dr. Zuhair bin Nasser Al-Hasnan, KFSHRC medical genetics consultant, said the team conducted a study on a Saudi...
JEDDAH: The Pakistan Welfare Society (PWS) organized a free medical camp and discussion on health for women at the Pakistani Consulate recently.Doctors and specialists diagnosed patients and distributed free medicines to needy patients, and arranged...
JEDDAH: Yemen Vice President and Prime Minister Khaled Bahah has thanked Saudi Arabia for standing by his country during tough times.Speaking at the World Government Summit in Dubai on Tuesday, he said: “Our GCC brothers, particularly Saudi Arabia, s...
RIYADH: Saudi Arabia joined the rest of the world in intensifying public awareness on cancer with activities spread over the week supporting the global cause that aims to save millions of lives every year by raising awareness and education about the...
RIYADH: Chairman of ACWA Power International Mohammed Abu Nayyan thanked King Mohammed VI of Morocco for personally inaugurating Morocco’s first solar power plant, Noor1, built by an international consortium led by his company.“We were extremely priv...
RIYADH: The Ministry of Health is considering imposing an asset declaration as well as an absence of interest conflict testimony on its employees as a measure in fighting corruption.Health Minister Khalid Al-Falih made the announcement at a one-day f...
DAMMAM: Abdussalam Kanniyan, chairman of the International Indian School in Dammam (IISD), has been honored with the “Person of the Year 2015” award by Vatakara NRI Forum, a community group in the Eastern Province.The award was based on his outstandi...
RIYADH: Andrej Plenkovic, the leader of the European Parliament Foreign Affairs Committee delegation, on Tuesday hailed Saudi Arabia for its yeoman services in looking after the displaced Syrians in countries such as Lebanon, Jordan and Turkey.“We fu...

Stay Connected

Facebook