Islamic bonds widen appeal

Demand for Islamic bonds is extending beyond the original customer base, with growing issuance and strong secondary trading among non-Muslims.

An Islamic bond issued last week by Aldar Properties, a Dubai-based real estate company, has secured more than 70% non-Muslim allocation, the highest allocation so far from non-Muslims investors. Aldar had requested a wider international take-up to broaden its investor base.

Aldar issued the bond with a maturity of four years and nine months, and attracted interest from 200 investors from Europe, the Middle East and Asia. The amount issued was increased to $2.53 billion from $2.2 billion, due to strong demand and half the issuance went to accounts in the UK.

Douglas Decker, London-based head of convertible origination at Barclays Capital, which underwrote the deal, said the secondary market in sukuk had also been growing significantly. He said: “We’ve been trading over $1 billion in the PCFC and Nakheel bonds [the two largest issues of Islamic bonds] and approximately $500 million in the Aldar. They are all traded pretty actively at a 25-point bid-offer spread in the secondary market.”

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Most read articles loading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here