Dubai: Tamweel, the mortgage company majority owned by Dubai Islamic Bank, hired banks for a possible bond sale as it seeks financing to repay liabilities and increase lending. The shares jumped the most in a month.
Citigroup, Standard Chartered and Dubai Islamic Bank will arrange investor meetings in Asia, Europe and the United Arab Emirates, the company said in a statement to Nasdaq Dubai yesterday. "A Dubai Islamic Bank-guaranteed issuance may be executed, subject to market conditions."
Tamweel is returning to tap the bond market as investors seek debt from the Arabian Gulf after a lull caused by the debt crisis in the US and Europe and Arab uprisings. Qatar raised $5 billion (Dh18.35 billion) from bond sales on Wednesday, while Abu Dhabi Islamic Bank borrowed $500 million, Bahrain raised $750 million and Abu Dhabi Commercial Bank raked in $500 million from Islamic bond sales.
"Appetite for a possible Tamweel sukuk all boils down to marketing as the Qatar deal may have saturated the market," said Ahmad Alanani, Dubai-based head of fixed-income sales for the Middle East and North Africa at Exotix Ltd. "There may be appetite for a Tamweel offering, especially with a DIB guarantee, but it all depends on the size and price."
Tamweel plans to raise at least $300 million to $500 million from Islamic bond sale in the fourth quarter, acting Chief Executive Officer Varun Sood said on September 27. The bonds may be denominated in dollars or Malaysian ringgit, he said.
The shares surged 2.8 per cent, the highest since October 30, to 70.6 fils in Dubai yesterday, valuing the company at Dh706 million. The mortgage lender posted a third-quarter profit of Dh15.7 million after Dh7.4 million a year earlier.