Rakia set to launch sukuk issue

Dubai: Ras Al Khaimah Investment Authority (Rakia), the government agency responsible for the economic development of the emirate, will launch its first ever sukuk issue tomorrow.

The $500 million benchmark size five-year sukuk guaranteed by the government of Ras Al Khaimah will be listed on the DIFX and the London Stock Exchange.

Ahead of the issue, the company will do roadshows in Dubai, Abu Dhabi, Bahrain, London and a few European cities depending on the investor response, said a source close to the issue.

The Rakia sukuk is the first to be launched since the credit crisis linked to the US subprime market hit the global financial markets.

Analysts said the demand and pricing of this sukuk issue will be closely watched by other regional issuers who had either postponed or cancelled debt issues in the wake of the credit crunch.

Significance

The Rakia sukuk is also significant for the UAE as the issue is very close to a sovereign debt issue. The issue will be jointly lead-managed by HSBC, Credit Suisse and NBD Investment Bank.

Rakia has achieved a 23 per cent growth in the third quarter of 2007, attracting a total of 217 new companies.

It expanded its client portfolio to include 792 companies within two years of operations while 2007 revenues have reached Dh118.04 million.

Rakia has plans to raise at least $1.8 billion in bonds and loans this year to build islands off the UAE coast and an aluminium plant in India.

Rakia's area of responsibility includes the Industrial Zone and the Free Zone in Al Hamra, and the Industrial Park in Al Ghayl.