(Corrects to say shareholders in third paragraph of story originally published Sept. 16.)
Sept. 16 (Bloomberg) -- Qatar Islamic Bank, the country’s biggest Shariah-compliant lender by assets, plans to raise as much as $750 million by issuing Islamic bonds, its first sale since 2010.
The Shariah-compliant bank hired HSBC Holdings Plc, Standard Chartered Plc, QInvest LLC and Deutsche Bank AG to manage the issuance of at least $500 million of debt, the lender said at a shareholders’ meeting in Doha today. The securities, which are known as sukuk and comply with Islam’s ban on interest, may have maturities of as much as seven years, Ahmad Meshari, the bank’s acting chief executive officer said today.
The proceeds from the sale will be used for local projects, the bank said, after shareholders approved a $1.5 billion-sukuk program. The Doha-based lender last raised $750 million from the sale of five-year Islamic bonds in September 2010, according to data compiled by Bloomberg.
Islamic bond sales in the six-nation Gulf Cooperation Council, which includes Qatar and Saudi Arabia, are headed for a record year after borrowing costs reached lows. Sukuk sales climbed to $17.7 billion so far this year from $4.8 billion in the year-earlier period, according to data compiled by Bloomberg.
The average yield on sukuk in the GCC declined two basis points, or 0.02 of a percentage point, to 3.08 percent on Sept. 14, the lowest on record, the HSBC/NASDAQ Dubai GCC US Dollar Sukuk Index show.
Qatar Islamic’s first-half profit rose 5 percent to 737 million riyals ($202 million), the lender said July 11. The bank’s shares have declined 7.5 percent this year to 78 riyals, compared with a drop of 2 percent for the QE Index.