Tamweel prices $300m Islamic bond

Dubai, January 13, 2012

Tamweel, the Dubai-based sharia-compliant mortgage lender, has priced a $300 million five-year Islamic bond, or sukuk, a document from lead managers said.

The paper, which is fully guaranteed by majority shareholder Dubai Islamic Bank, priced at par with a profit rate of 5.154 per cent and carried a spread of 400 basis points over midswaps, the document said.

The spread was in line with price talk which was issued on Wednesday.

Citi, DIB and Standard Chartered were the lead managers on the transaction.

Tamweel completed a series of investor meetings in December, organised by the same banks, but chose not to issue a deal at their conclusion.

The paper, which is the first issue from Tamweel's $1 billion sukuk programme, will be listed on the Irish Stock Exchange and is rated A by Fitch and Baa1 by Moody's.

DIB, the United Arab Emirates' third-largest bank by market value, raised its stake in Tamweel to 57.33 percent in September 2010, effectively rendering the mortgage lender a subsidiary of the bank.

Tamweel and its rival Amlak ran into trouble after the collapse of Dubai's real estate sector in 2008.

Trading in the shares of both companies were halted, with Tamweel only resuming trade last May after a hiatus of more than two years. Amlak's shares remain suspended.

Tamweel's shares fell 0.7 percent on Thursday and are down 5.6 per cent this year.-Reuters

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