LUXEMBOURG: Launched
yesterday at the tight end of initial price guidance of 0-2bps below
midswaps – which would make the Grand Duchy the first sovereign to price
Sukuk at negative swaps – Luxembourg is expected to announce pricing on
its much-awaited inaugural Islamic debt today.
The ‘AAA’-rated (by Moody’s and S&P) Reg S facility is seeing
overwhelming demand as the book-building process for the landmark program
has reportedly amassed over EUR500 million (US$632.55 million) in orders
– more than two times the intended size of the EUR200 million (US$253.02
million) paper.
Although not the first sovereign Sukuk issue out of Europe, the facility
nonetheless marks an important milestone not only for the Islamic finance
industry as it welcomes growing interest from traditionally
non-Muslim-majority jurisdictions including the UK, Hong Kong and South
Africa, but also for Luxembourg as it cements its ambition to become a
hub for Shariah compliant finance.
“The Luxembourg Sukuk issuance is a very positive development for the
Sukuk industry being a rare euro-denominated Sukuk from a strong
‘AAA’-rated sovereign,” said Hani Ibrahim, the head of debt capital
markets at QInvest (joint lead arranger of the deal), who spoke
exclusively to IFN. “It’s an issuance that will cement Luxembourg’s
position as one of the premier Islamic finance centers and potentially
boost the development of Islamic finance across Europe.”
Banque Internationale à Luxembourg, BNP Paribas, HSBC and QInvest are the
transaction’s arrangers.
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