Citigroup is having talks with other potential sellers of Shariah-compliant debt in the country, said Hulusi Horozoğlu, head of global Islamic banking at Citigroup, in an e-mailed response to questions. He said there was “significant appetite” from investors for the Kuveyt Türk sale last month.
Citigroup and Liquidity Management House, a unit of Kuwait Finance House KSC which is the owner of Kuveyt Türk, acted as arrangers in the lender’s sukuk sales, the first in Turkey after regulators allowed companies to offer Islamic bonds in April. The three-year notes paid a coupon of 5.25 percent.
Global Islamic bond offerings may accelerate in the next 18 months, led by countries new to the market, Mohamed Damak, a Paris-based credit analyst at Standard & Poor’s, said on Aug. 2. Total sales may reach about $30 billion this year as the global economy recovers and nations build infrastructure, Kuwait Finance House said on Aug. 22.
Decline in global sukuk sales
Global sukuk sales in the year to date fell 13 percent from a year ago to $10.1 billion, according to Bloomberg data.
Turkey’s government is considering selling sukuk “in the future,” Finance Minister Mehmet Şimşek said in an interview on Aug. 25, without elaborating.
“We believe there is significant appetite for sukuk issuances, both on the issuer and investor sides, and we would expect to see greater volumes going forward,” Horozoğlu said. “A key driver for this market will be the growth in Islamic banking at the retail level, which has shown tremendous growth over the preceding few years.”
Istanbul-based Kuveyt Türk is one of four Islamic banks in Turkey. The others are Bank Asya, Türkiye Finans and Albaraka Türk.
Kuveyt Türk may sell more than $100 million of five-year sukuk bonds, Chief Executive Officer Ufuk Uyan said in an interview on Aug. 25. He said last month’s sale attracted bids worth 1.5 times the amount of debt on sale.
The bonds were backed by a portfolio of Islamic financial contracts, and Islamic banks bought half of them, Horozoğlu said. European and Middle Eastern investors made up 95 percent of all buyers, he said.
Source : http://hurriyetdailynews.com/n.php?n=citigroup-plans-more-sukuk-sales-from-turkey-2010-09-20 - Sept 20, 2010
