Emirates Islamic Eyes Benchmark Sukuk, Parent To Back Bond
Sukuk issue dependent on market conditions – source; Issue fully backed by parent ENBD – document; Roadshows start Jan. 5, end in London
January 3, 2012 3:56 by Reuters
Emirates Islamic Bank, a unit of Emirates NBD (ENBD), has picked six banks for a potential benchmark-sized dollar sukuk, or Islamic bond, a source familiar with the matter said on Tuesday.
Any eventual bond issue will be fully guaranteed by Emirates NBD, lead arrangers said in a mandate announcement seen by Reuters.
Investor meetings kick off in Malaysia on Jan. 5 and will cover Singapore and Abu Dhabi before ending in London on Jan. 10. A sukuk could follow depending on market conditions, said the source who spoke on condition of anonymity.
Benchmark-sized is normally understood to be at least $500 million. ENBD,Dubai‘s largest lender by market value, has just under $2.2 billion in debt maturing in 2012. The government has a 55.6 percent stake in the bank.
An ENBD spokesman was not immediately available for comment.
In December, ENBD Chief Executive Rick Pudner said the bank was eyeing a five year Islamic bond and reviewing the timing of an issue.
There is strong demand for sukuk despite the global volatility partly because Islamic investors in the Gulf remain cash-rich and due to the limited supply of sukuk issues.
Emirates NBD shares ended 2 percent lower on Tuesday, after ending 2011 over 6.5 percent higher, outperforming the broader index. (Additional reporting by Rachna Uppal; Editing by Amran Abocar)
By Mirna Sleiman