Persian Gulf issuers are choosing to sell non-Islamic bonds instead of sukuk in the borrowing rush that has followed Dubai World’s debt restructuring.
Non-Islamic bond sales from the region may almost double to $15 billion this quarter as companies from Qatar National Bank SAQ, the country’s largest bank, to Oman-based MB Petroleum Services LLC tap the market, investment bank Exotix Ltd. in Dubai estimates. The $1 billion Shariah-compliant bond sale by Saudi Aramco and Total SA is the only announced sukuk sale for the rest of 2010.
The abundance of liquidity in the non-Islamic debt market, the enforceability of investors’ rights in defaults and the extra cost associated with Islamic bond documentation are steering issuers away from sukuk, Unicorn Investment Bank BSC’s senior vice president of capital markets, Nida Raza, said Nov. 2.
No comments:
Post a Comment