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Thursday, 8 May 2008

Ras Al Khaimah plans $2b Islamic bond sale

Dubai: The Ras Al Khaimah Government plans to issue the UAE's first dirham-denominated sovereign sukuk (Islamic bonds) with credit rating, according to Standard Chartered Bank; sole lead manager and sole bookrunner for the sukuk programme.

The bank has not revealed the size of the issue. However, Reuters reported quoting unnamed sources that the emirate will sell up to $2 billion (Dh7.3 billion) sukuk to fund infrastructure projects.

According to Reuters, the first tranche of bonds will be at least of benchmark size ($500 million). The inaugural sukuk issue will be managed by Standard Chartered, the bank said in a statement yesterday.
Credit ratings
The sukuk programme follows the government's initiative to obtain credit ratings earlier this year through rating advisory services by Standard Chartered Bank in which both Fitch and Standard and Poor's (S&P) provided the RAK government with an 'A' level rating.

The inaugural issuance under the programme will be for a tenure of five years, with investor meetings scheduled to start this week.

"The arrangement of this sukuk programme is in line with the government's strategic vision of the progressive development of Ras Al Khaimah. The strong credit ratings from S&P and Fitch are also independent votes of confidence in the emirate's economic programme and fiscal position," said Adnan Al Maimani, president of the Investment of Development Office.

The sale is one of a growing number in the Gulf in recent weeks.

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