Emaar prices $500m sukuk at par with 6.4% profit rate

Dubai?s Emaar Properties launched on Thursday a $500 million seven-year sukuk at a lower profit rate of 6.4 per cent underscoring the growing global investor appetite for Islamic bonds amid the eurozone crisis.

Arranging banks said the sukuk priced at par attracted 185 orders worth $4.65 billion with the Middle East accounting for 48 per cent of the allocation, followed by Europe at 38 per cent, Asia at 13 per cent and the US offshore one per cent.

The overwhelming response to Emaar?s first sukuk in 2012 came in the wake of Qatar?s record-breaking dollar-denominated $4 billion, two-tranche sukuk that exemplified the growing interest in high-grade Gulf debt, which is being sought as a safe haven from the global financial crisis, analysts said.

The master developer, builder of the world?s tallest tower, Burj Khalifa, is seeking to take advantage of tightening spreads to raise cheap financing as well as strong global demand for sukuk.

Pricing at launch for the sukuk was tighter than guidance released on Wednesday, signalling strong appetite for the deal.

Yields on Emaar?s existing $500 million sukuk, issued early in 2011 at 8.5 per cent and maturing in 2016 have tightened since the borrower announced pricing for its latest issue, data showed.

The outstanding sukuk was bid at 109.5 cents on the dollar on Thursday morning, to yield about 5.8 per cent, tighter from about 6.1 per cent on Tuesday, according to Thomson Reuters data.

via Business – Emaar prices $500m sukuk at par with 6.4% profit rate.