Dubai: Emirates NBD, the UAE's largest bank by assets, intends to sell an Islamic bond (sukuk) this month, said Rick Pudner, CEO of the bank yesterday.
Emirates Islamic Bank (EIB), the Islamic bank belonging to the group, is likely to launch a benchmark-sized issue.
"We are aiming for the launch of the issue sometime this month. We have not yet finalised the size of the issue. It will largely depend on the price," said Pudner.
Meanwhile, bankers close to the bond issue said the managers and book runners have been identified and the issue could hit the market as early as the second week of this month.
Emirates NBD has a debt of Dh8 billion maturing in 2012. The bank has been looking at various funding options to finance the maturities.
"The maturities this year are within our financing capabilities, but we will be exploring various funding options," Pudner said during a conference call in October.
Funding options
The bank's top management has always maintained that it would look at funding options such as sukuk and conventional bonds.
But the bank has repeatedly said it would not overpay for issuing new debt, and pricing levels so far this year had been too expensive. In May, the bank completed a debt swap for two existing notes due to expire in 2016 for longer-term debt.
"We have been exploring the bond/sukuk option for medium-term funding. But the huge volatility in the market kept us away from the market.
"It does not make business sense to borrow at such high costs," Surya Subramanian, Group Chief Financial Officer of Emirates NBD, said.
If the sukuk issue goes through, the bank will join Union National Bank, Abu Dhabi Commercial Bank and Abu Dhabi Islamic Bank, all of which issued benchmark-sized sukuk in the fourth quarter.
Technology: Tanfeeth, IBM ink deal
Tanfeeth, a fully-owned subsidiary of Emirates NBD, has announced a long-term strategic agreement with IBM to support Tanfeeth as the Gulf Cooperation Council's first shared services organisation.
Through this agreement, IBM will provide Tanfeeth with access to its global process capabilities in services, tools and training, and manage part of Tanfeeth's delivery portfolio.
"This strategic agreement which will solidify Tanfeeth's position as the GCC's first-ever shared services organisation," said Rick Pudner, CEO of Emirates NBD.