A $1 billion sukuk issue by Abu Dhabi Islamic Bank this month may start a trend that was probably not contemplated by the founders of modern Islamic finance: Islamic bonds may become a key tool for banks to meet tightening capital rules.
The trend could add further momentum to a global boom in sukuk issuance. It could also ease pressure on banks which find it hard to raise capital from equity issues as global financial instability depresses stock markets.
ADIB attracted a spectacular order book of over $15 billion for this month's $1 billion perpetual sukuk, which has no maturity date; ADIB can choose to repay the bond on certain dates from 2018 if it wishes.
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