A $250 million issue of Islamic leasing bonds (Ijara sukuk), arranged by the Liquidity Management Center (LMC) in coordination with the Bahrain Monetary Agency (BMA), has been oversubscribed by $99 million.
Ijara is the transfer of ownership of a service or asset for an agreed upon consideration. Ijara securities can be issued in the capital markets to mobilize deposits for the development of long-term infrastructure projects.
Tenders worth $349 million have been received for the five-year issue, which starts on May 27, 2003 and matures on May 27, 2008. The issue is the largest-ever offering of Bahrain Government Islamic bonds. It is also the first bond issue made by the BMA through a market maker.
Bahrain-based LMC is the arranger and manager of the issue, which has been underwritten by eight major banks. Lead managers to the issue are Kuwait Finance House (KFH) and National Bank of Bahrain (NBB), while other participants in the consortium, as co-lead managers, are Islamic Development Bank (IDB), Dubai Islamic Bank, Credit Agricole Indosuez, Maybank International, Bank of Bahrain and Kuwait (BBK) and Bahrain Islamic Bank.
The rental return on the sukuk is 60 basis points over the London inter-bank offered rate (Libor) for six months. The sukuk will be listed and traded on the Bahrain Stock Exchange. They can also be traded at prevailing market prices, over-the-counter through the participating banks. — (menareport.com)
© 2003 Mena Report (www.menareport.com )