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Sharjah Islamic to issue $500 mln 5-yr sukuk, sets guidance
April 9, 2013 / 8:48 AM / in 5 years

Sharjah Islamic to issue $500 mln 5-yr sukuk, sets guidance

DUBAI, April 9 (Reuters) - Sharjah Islamic Bank (SIB) will issue a $500 million five-year sharia-compliant bond, or sukuk, on Tuesday, arranging banks said, after strong demand helped the lender to set price guidance at lower end of initial indications.

Lead arrangers released official price guidance at 3.125 percent after suggesting the low 3 percent area as an indicator on Monday.

The sukuk has attracted strong demand, with order books seen over $2 billion at the time official guidance was released. The deal size has been capped at $500 million.

Traders indicated that the sukuk could tighten further at launch to price at 3 percent.

Sharjah Islamic is 31-percent owned by the government of Sharjah, the third-largest emirate in the United Arab Emirates. Kuwait Finance House (KFH) holds a 20 percent stake in the Islamic lender.

Its existing sukuk, a $400 million 4.715 percent issue maturing in 2016 was bid at 106.5 cents on the dollar on Tuesday morning, according to Thomson Reuters data, to yield 2.5 percent. For an extended two-year maturity, the new issue is offering investors a premium of at least 50 basis points.

Abu Dhabi’s Al Hilal Bank, HSBC Holdings, Kuwait’s Liquidity Management House, a unit of KFH and Standard Chartered Plc are mandated lead arrangers on the sukuk. (Reporting by Rachna Uppal; Editing by Dinesh Nair)

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