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Sunday, 27 January 2008

Tamweel Islamic bond is ‘oversubscribed’

by Agencies on Saturday, January 26,2008

Tamweel, the second largest mortgage lender in the United Arab Emirates by market value, said on Saturday its sale of Dh1.1 billion convertible Islamic bonds had been oversubscribed.

The bonds, which carry a profit rate of 4.31 per cent, can be exchanged for Tamweel's stock at Dh8.33 per share, the company said in a statement. Tamweel's shares last traded at Dh6.70 and closed at Dh6.92 on December 12, the day before the sale was announced.

Islamic bonds, or sukuk, comply with Islam's ban on lending on interest and offer investors a share of profits from underlying assets instead.

Barclays Capital was the lead manager and bookrunner of Tamweel's sale which ended on Thursday, the mortgage lender said.

"Issued in the midst of difficult market conditions, the sukuk was oversubscribed within hours of launch," Tamweel's Chief Executive Officer Adel Al Shirawi said in the statement.

He did not say how much investors had offered for the bonds.

Larger rival Amlak Finance delayed a sale of Islamic bonds planned for the fourth quarter because of the fallout from the credit crisis triggered by US mortgage defaults.

Tamweel will use the funds for expansion, Shirawi said. The mortgage lender has applied to list the bonds on the Dubai International Financial Exchange. (Reuters)

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