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Sunday, 23 May 2010

Qatar Islamic Bank to Sell $750 Million Sukuk in 2010

May 19 (Bloomberg) -- Qatar Islamic Bank SAQ, the Gulf state’s biggest Shariah-compliant lender, plans to sell as much as $750 million of bonds in its first Islamic debt offering, according to the company’s chief executive.
Talks with rating service providers have been completed and the bonds, known as sukuk, are likely to be sold in the second half of this year, Chief Executive Officer Salah Mohammed Jaidah said in an interview today in Kuala Lumpur.
“It’s not the liquidity need as much as it is positioning Qatar Islamic Bank into the sukuk market and becoming part of it,” Salah said. “We will make the right call at the right time.”
Islamic bond sales are growing at the fastest pace in three years as yields on securities complying with the religion’s ban on interest fall more than those on emerging-market notes even as Europe’s debt crisis worsens. Qatar Islamic’s announcement follows plans by Malaysia and Indonesia to sell sukuk this year.
Malaysia today started a roadshow to market its five-year dollar-denominated sukuk, its first global sovereign issuance in eight years. Indonesia said last week it plans a benchmark offering, which is typically around $500 million.
Sukuk sales climbed 24 percent to $4.6 billion so far in 2010, the most since a 50 percent increase in the same period three years ago, according to data compiled by Bloomberg. The spread between the average yield for the debt and the three- month London interbank offered rate narrowed 301 basis points, or 3.01 percentage point, to 437 basis points in the past year, according to HSBC/NASDAQ Dubai US Dollar Sukuk Index. A similar measure for emerging-market debt shrank 133 basis points.
Qatar Islamic hired HSBC Holdings Plc and Credit Suisse Group AG to sell Islamic bonds, two bankers familiar with the transaction said in February.

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