Dubai: Goldman Sachs will meet fixed income investors next week ahead of issuing a potential US dollar-denominated sukuk, a document from lead managers said on Thursday, the latest non-Islamic borrower to announcing sukuk plans.
The investment bank plans to issue the wakala-structured Islamic bond through the JANY Sukuk Co vehicle and is targeting a benchmark-sized deal, the document said.
Traditionally, benchmark size is understood to mean at least $500 million, while under a wakala structure, certificates are issued by an originator to purchase specific assets, which are then given to an agent for management.
The last month has seen a number of borrowers who wouldn’t be regarded as traditional sukuk issuers announce plans to tap Islamic investors, following on from the United Kingdom’s debut sukuk in June.
Both Hong Kong and South Africa said Aug. 28 they planned to meet investors ahead of potential sukuk issues, while Luxembourg’s finance ministry said on August 11 it had chosen banks to arrange its first Islamic bond.
The increase in these conventional borrowers tapping the Islamic finance space indicates the development of the sharia-compliant market from being a niche product only five years ago, as well as the recognition of significant pools of liquidity among investors in areas like the Gulf, who prefer financial products which comply with cultural values.
Year-to-date, issuance of sukuk globally has reached $85.9 billion through 456 deals, compared to $74.9 billion through 558 deals in the same period last year, according to data from Zawya, a Thomson Reuters company.
Goldman Sachs picked itself, Abu Dhabi Islamic Bank, Emirates NBD, National Bank of Abu Dhabi and the investment banking arm of Saudi Arabia’s National Commercial Bank to arrange the investor meetings, the document said.
Roadshows will be held in Qatar on Sept. 10 and in the United Arab Emirates on the following day.
Any potential sukuk under the JANY Sukuk Co vehicle will be guaranteed by Goldman Sachs and is expected to be rated A-/A by Standard & Poor’s and Fitch Ratings respectively — identical to the ratings of the investment bank — the document added.
