JEDDAH, 4 January 2005 -- The Durrat Sukuk will finance the reclamation and infrastructure for the initial stage of a broader $1 billion world-class "Durrat Al Bahrain" residential and leisure destination, currently Bahrain's largest development project of its kind.
This follows the official signing of the Durrat Al Bahrain Istisna'a Ijara Sukuk (Durrat Sukuk) at Ritz Carlton Hotel in Bahrain yesterday, which marks a milestone for the Durrat Al Bahrain project.
The project company, Durrat Khaleej Al Bahrain, is equally owned by the government of Bahrain and Kuwait Finance House (KFH), Bahrain.
Liquidity Management Center (LMC) was mandated by the project company and KFH Bahrain to act as the arranger and placement agent to the Sukuk issue. As a shareholder of the project company, KFH Bahrain has also played a key role in the structuring, arrangement and placement process. Both LMC and KFH have expressed particular satisfaction at nearing the completion of the Durrat Sukuk issuance process.
"We're very happy with the closing of the oversubscribed issue and look forward to a successful completion of the Durrat Project, which will be a significant landmark achievement for Bahrain. We'll ensure a smooth administration and management of the Durrat Sukuk during the issue period," Project Company Chairman Abdulhakeem Alkhayyat said and thanked all the parties involved including the underwriters and participants to the Issue.
"I feel the Durrat Sukuk reflects the current buoyancy in the Sukuk market as well as the viability of the Durrat Khaleej Al Bahrain Project. It is extremely positive to see Islamic financing instruments continuing to gather momentum in broader market place. The breadth of investors attracted to the Durrat Sukuk is ample reward for the extent and versatility of our marketing and placement efforts. On behalf of the organization, I would like to thank KFH for the faith they have in us throughout the transaction development process," LMC Chairman Aref A. Kooheji said.
Kuwait Finance House, Kuwait, which wholly owns KFH Bahrain and is a shareholder in LMC, has been instrumental in the current success of the Durrat Sukuk issue by acting as Lead Underwriter for the issue at a very early stage. "We're very hopeful of the complete success of the Durrat Project and this is a first step toward achieving this objective. We remain committed to the attainment of success for the Islamic Sukuk industry for which Durrat Sukuk will be a significant contribution," Mohammad S. Al-Omar, AGM Investments, KFH Kuwait, said and thanked the co-underwriters and participants to the issue.
"We've been delighted with the support we have received from our shareholders as well as the underwriters and other participating institutions. This is an economically significant project for Bahrain, with which we're proud to be actively supporting further growth in the domestic economy," LMC's acting Chief Executive Officer Ahmed Abbas said.
The issue was extremely successful and closed at $152.5 million with $32.5 million oversubscription. It was underwritten by Lead Underwriter KFH Kuwait in addition to 11 other leading underwriting financial institutions including Dubai Islamic Bank, LMC, Bahrain Islamic Bank, Islamic Development Bank, Emirates Islamic Bank, Bank of Bahrain and Kuwait, General Organization for Social Insurance, Bahrain, National Bank of Sharjah and Arab Islamic Bank (Palestine). The return on the Sukuk is 125 basis points over three months LIBOR payable quarterly, with the Sukuk having an overall tenor of five years and an option for early redemption.
Khalil Hanware, Arab News
© Arab News 2005
