Islamic syndicated lending in Europe, the Middle East and Africa rose to a four-year high in 2012 as companies from Dubai’s DIFC Investments LLC to Saudi Arabia’s Etihad Etisalat take advantage of falling borrowing costs.
Shariah-compliant transactions have climbed to $8.37 billion (Dh30.74 billion) this year, led by Etihad Etisalat’s 10 billion-riyal ($2.67 billion) deal in February, according to data compiled by Bloomberg. State-controlled DIFC Investments raised $1.04 billion to help settle a $1.25 billion Islamic bond. This year’s lending compares with $5.2 billion in the year-earlier period and $11.9 billion for the first seven months of 2008, before the real-estate crash shut the market. Non-Islamic loans from the region declined 40 per cent this year to $434 billion.
The increase in syndicated transactions parallels the development of the Islamic bond market in an industry that is set to expand to $2.8 trillion by 2015, according to the Kuala Lumpur-based Islamic Financial Services Board. The three-month London-interbank offered rate, which is typically used as a benchmark for dollar-denominated debt, fell to 0.443 per cent yesterday, the lowest in almost nine months.
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