Sudan, Albaraka, IDB, Pakistan, Thailand Plan Issuance: Islamic Bond Alert
The following borrowers are expected to sell Islamic bonds, which use asset returns to pay investors to comply with the religion’s ban on interest.
Global sales of sukuk fell 29 percent to $13.5 billion so far this year from the same period in 2009, according to data compiled by Bloomberg. Issuance totaled $20.2 billion last year, up from $14.1 billion in 2008.
SUDAN: The African country plans to raise $600 million from the sale of three-year local-currency Islamic bonds by the end of 2010, central bank Governor Sabir Hassan said. The government has started offering $200 million of sukuk and plans to conclude the issue on Nov. 15. The remaining $400 million will be sold in stages, said Hassan. The Islamic bonds will pay investors a return of between 12 percent and 13 percent every quarter.
ALBARAKA BANKING GROUP: The largest listed Islamic bank in Bahrain expects to raise $200 million from the sale of Shariah- compliant bonds before the end of the year, using Standard Chartered Plc as one of the managers, Chief Executive Officer Adnan Ahmed Yousif said.
PAKISTAN: The central bank will sell 40 billion rupees ($467 million) of three-year Islamic bonds at an auction on Nov. 8 and an equal amount on Dec. 13, the State Bank of Pakistan said in a statement. The central bank may sell such bonds on a quarterly or half-yearly basis, said Saleem Ullah, a director at the central bank.
ISLAMIC DEVELOPMENT BANK: The multilateral lender plans to sell at least $500 million of sukuk in 2011 to meet its funding needs of more than $1 billion annually, said Vice President Abdul Aziz Al Hinai. The bank sold a similar amount in October.
THAILAND: The Islamic Bank of Thailand, the nation’s only bank to comply with Shariah law’s ban on interest, will delay its first sale of sukuk until early next year as it awaits new guidelines from the securities commission, President Dheerasak Suwannayos said. The government is also considering selling 40 billion baht ($1.3 billion) to 50 billion baht of Islamic bonds to fund infrastructure projects, said Dheerasak, who is a member of the government’s steering committee for Islamic finance.
KNM GROUP BHD.: The Malaysian oil and gas services provider won approval from the Securities Commission to sell as much as 1.5 billion ringgit ($487 million) of Islamic debt, according to a company filing to the Kuala Lumpur stock exchange. The proposed issue involves as much as 400 million ringgit of commercial paper and 1.1 billion ringgit of medium term notes, it said.
CAGAMAS BHD.: Malaysia’s national mortgage company may sell more Islamic bonds this year and next following a sale in August under its 5 billion ringgit Sukuk al-Amanah Li al-Istithmar, or ALIm, program, Chief Executive Officer Steven Choy said. The company sold 500 million ringgit of Islamic bonds on Oct. 18, Bloomberg data show. As much as 1 billion ringgit of notes under the sukuk ALIm program was sold in August.
SAUDI ARABIAN OIL CO.: Saudi Aramco, the world’s largest state-owned oil company, and Total SA plan to sell Islamic bonds valued at $1 billion this year to fund construction of their joint oil refinery in Jubail, said Simon Eedle, global head of Islamic banking at Credit Agricole SA, the lead arranger of the issuance.
GAMUDA BHD.: The Malaysian builder plans to sell as much as 800 million ringgit of Islamic notes this year, according to RAM Rating Services Bhd., which rated the bonds AA3, its fourth- highest rating.
EGYPT: Egypt plans to issue guidelines on Islamic debt issuance in 2011 to pave the way for sukuk sales in the country, said Ziad Bahaa El-Din, chairman of the Cairo-based Egyptian Financial Supervisory Authority. Al Baraka Bank Egypt ESC, a Cairo unit of Bahrain-based Islamic lender Albaraka Banking Group, may sell dollar-denominated Islamic bonds in the second half of 2011, said the bank’s Chairman Adnan Ahmed Yousif.
PT BANK MUAMALAT INDONESIA: The Islamic lender plans to sell 1 trillion rupiah ($112 million) of Islamic bonds in the second half of 2011, Andi Buchari, director of compliance and corporate planning at the Jakarta-based bank, was quoted as saying by the Investor Daily newspaper.
SENAI-DESARU EXPRESSWAY BHD.: The operator of Malaysia’s third-longest highway in the state of Johor will issue as much as 1.15 billion ringgit of Islamic medium-term notes to bondholders this month as part of its debt restructuring program, Chief Executive Officer Mustaza Salim said. The new issue includes debt with maturities ranging from one year to 20.5 years, the company said in a statement.
MALAYSIA DEBT VENTURES BHD.: The venture capital firm owned by the Ministry of Finance plans to sell as much as 500 million ringgit of sukuk in September or October next year to fund investments in technology projects, said Chief Executive Officer Md. Zubir Ansori Yahaya. The company sold the same amount of notes in October.
ARAB PETROLEUM INVESTMENTS CORP.: The energy investment unit of the Organization of Arab Petroleum Exporting Countries plans to sell a Saudi riyal-denominated benchmark-sized bond as the company expands in the kingdom, the company said. It didn’t say whether the debt will be Islamic.
INDONESIA: Southeast Asia’s largest economy plans to sell Islamic debt in the overseas market in the first half of 2011 and for individual investors in the first quarter, said Rahmat Waluyanto, director general at the finance ministry’s debt management office.
TURKEY: Citigroup Inc. plans to arrange more sales of Islamic bonds from Turkey after managing a $100 million issue for Kuveyt Turk Katilim Bankasi AS, said Hulusi Horozoglu, director of global Islamic banking at Citigroup in August. Kuveyt may sell more than $100 million of five-year sukuk in 2012, the company’s Chief Executive Officer Ufuk Uyan said Aug. 25. The government may consider selling yen-denominated bonds or Islamic securities, Emre Balibek, the Treasury’s deputy general director for public finance, said in June. Turkey is rated Ba2 by Moody’s Investors Service and BB by Standard & Poor’s.
NAKHEEL PJSC: The property unit of Dubai World may issue as much as $3.2 billion of five-year sukuk to pay contractors as part of its debt restructuring plan, JPMorgan Chase & Co. said in a report Aug. 26. The bond to be issued against trade claims is estimated to have a fair value in the low 60 cents to the U.S. dollar, it said. Nakheel will issue bonds this year to cover 60 percent of debt it owes contractors, Chairman Ali Rashed Lootah was quoted as saying by Al Khaleej.
KAZAKHSTAN: The former Soviet republic that last sold debt overseas in 2000 is planning a debut Islamic bond sale this year to broaden its investor base, said Aibek Bekzhanov, head of Islamic instruments at the Regional Financial Center of Almaty without giving details.
PHILIPPINES: State-owned Al-Amanah Islamic Bank is looking to sell the nation’s first Islamic bonds, the lender’s President Armando Samia said in July, without giving the size or timing. The proposal is at a “very exploratory stage,” he said.
AHMED SALEM BUGSHAN GROUP: The Saudi Arabia-based company, known as ASB, plans to raise as much as $100 million selling five-year Islamic bonds to fund projects including a mega-steel plant and a real-estate development, Mohamed H. Zakaria, senior vice president of the group, said in an e-mailed statement. The bond will offer a semi-annual return of 125 basis points more than six-month Libor, the rate banks charge each other on loans. ASB may ask Fitch Ratings or S&P to rate the debt, he said.
SAUDI ELECTRICITY CO.: The Arab world’s largest utility company may issue global sukuk in 2011 after April’s sale of 7 billion riyals ($1.87 billion) of Islamic notes, according to Executive Director of Treasury Fahad Alsudairy.
LUXEMBOURG: The country is considering selling Islamic bonds, central bank Governor Yves Mersch said at a conference in Bahrain without disclosing the size and the timing of the sale.
KENCANA PETROLEUM BHD.: The Malaysian oil and gas contractor will sell 250 million ringgit of Islamic bonds this year to help finance vessel purchases. State bond insurer Danajamin Nasional Bhd. agreed to guarantee the notes, enabling them to have the highest AAA rating for local bonds.
WAHA CAPITAL PJSC: The Abu Dhabi-based investment and leasing company said its shareholders approved a plan to issue mandatory convertible bonds or sukuk worth 1 billion dirhams to strengthen its finances and support expansion plans.
VTB BANK OJSC: VTB Bank plans to sell Islamic bonds worth about $200 million in the second half of the year, Reuters reported in April, citing an unidentified person familiar with the plan.
EMIRATES INTEGRATED TELECOMMUNICATIONS CO.: The Dubai-based phone operator known as Du, may consider selling Islamic bonds in coming years to fund expansion, Chief Executive Officer Osman Sultan said in April without disclosing the amount.
LAFARGE MALAYAN CEMENT BHD.: Malaysia’s largest cement maker will sell as much as 350 million ringgit of Islamic bonds under a seven-year program to fund expansion, the company said March 26. The debt is rated AA2 by RAM Rating Services Bhd., its third-highest ranking for long-term corporate debt instruments.
LEBANON: Lebanon may sell Islamic bonds in 2011, according to the central bank in February. The country has more than $2 billion of dollar-denominated debt maturing this year, according to data compiled by Bloomberg. It is rated B2 by Moody’s, five levels below investment grade.
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