Following the successful closure in October by Qatar Islamic Bank (QIB), the largest Islamic bank in Qatar, of its debut $750 million fixed-rate Wakala Sukuk issued on its behalf through a special purpose vehicle (SPV), QIB Sukuk Funding Limited, more Qatari corporates are coming to the market to raise funds through the issuance of Shariah-compliant commercial papers.
Qatari corporates have been slow in joining the global Sukuk origination market, especially in the Gulf Cooperation Council (GCC) market. It remains a moot point whether this was due to uncertainty relating to sukuk structures from a Shariah-compliance point of view, or whether the economic impact of the financial crisis has paved the way for raising funds from the market, or whether it is merely an exercise in benchmark issuances to set the price for a Qatari risk at least in the Islamic capital market space.
The fact that the QIB issuance was oversubscribed to the tune of $6 billion indicates huge latent demand for "A" rated sukuk. The QIB issuance, which was jointly lead arranged by QInvest, HSBC and Credit Suisse, is the first international issuance by QIB and the first sukuk by a Qatari financial institution. The three institutions were also the book runners, while the Islamic Development Bank and National Bank of Abu Dhabi were the co-managers.
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