Wednesday, Jun 20, 2012
DUBAI (Zawya Dow Jones)--Tamweel, a home financing company owned by Dubai Islamic Bank, is set to sell a $235 million Islamic bond, or sukuk, backed by the company's mortgage book, according to ratings agency Moody's Investors Service.
The securitization is the first of its kind in the Arab Gulf since the onset of the financial crisis, Moody's said in an emailed statement. The crisis cut off Tamweel's financing lifelines and sent Dubai's overheated real estate market reeling.
Tamweel, which was taken over by Dubai Islamic Bank in 2010 amid the crisis, is currently meeting with investors to promote the deal. The company is unlikely to raise more than $235 million because the size is tied to the value of the mortgages it wants to securitize, according to a person familiar with the transaction.
The last time a Gulf company carried out a mortgage securitization was in 2007, when Tamweel closed a $210 million deal similar to the current one. Tamweel had an Islamic home financing portfolio worth AED9.3 billion ($2.53 billion) at the end of last year, Moody's said.
Tamweel's floating-rate sukuk is nominally set to mature in 2046, but the duration of the securitization is tied directly to the mortgages that underlie it. The issue could expire before that date as customers repay their home financing.
Moody's gave the sukuk a provisional "Aa3" rating.
-By Asa Fitch, Dow Jones Newswires, +971 4 446-1685, asa.fitch@dowjones.com; Twitter: @ZDJnews
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
20-06-12 0716GMT
