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Monday, 18 February 2008

Alaqaria looks to fund $825mn developments by selling Islamic bond

Qatar Real Estate Investment (Alaqaria) said it plans borrow funds by the third quarter, possibly by selling Islamic bonds, to finance 3 billion riyals ($824.6 million) worth of projects in Qatar.Alaqaria, in which the government of the world's biggest exporter of liquefied natural gas owns 27%, could also consider a securitisation or bank loans, Chief Executive Osama Abu Baker told Reuters by telephone from Doha."The market is choppy at the moment and we are holding our horses," Abu Baker said. "We can wait until the third quarter."

Gulf Arab issuers had put borrowing plans on hold as spreads on Islamic bonds widened at the end of last year, more than doubling between July and October, according to HSBC data.Alaqaria sold Islamic bonds, or sukuk, worth $300 million in August to finance expansion. They were the first rated sukuk for a Qatari corporate.Abu Baker would not say how much Alaqaria, which focuses on the construction of housing and related facilities in industrial areas, planned to borrow this year."The value of projects exceeds 3 billion riyals," Abu Baker said. "We would like to cover that."Islamic law bans interest and favours instead a return derived from underlying physical assets. (Reuters)

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