Tenaga Nasional, Midciti, Indonesia, Saudi Islamic Bond Alert

The following borrowers are expected to sell Islamic bonds, which use asset returns to pay investors to comply with the religion’s ban on interest.

Global sales of sukuk climbed to $17.3 billion in 2011, from $10.7 billion a year earlier, according to data compiled by Bloomberg.

TENAGA NASIONAL BHD. (TNB): Malaysia’s biggest power producer plans to raise 5 billion ringgit ($1.6 billion) from a 20-year local-currency sukuk in October, Bernama reported, citing Chief Executive Officer Che Khalib Mohamad Noh. Marketing will begin in the third week of October, the national news service reported.

MIDCITI RESOURCES SDN Bhd.: A unit of Malaysian developer KLCC Property Holdings Bhd. said it plans to raise as much as 880 million ringgit through an Islamic bond sale. Proceeds will be used to replace existing debt and for working capital, it said in a Kuala Lumpur stock exchange filing.

INDONESIA: The government will likely sell a global sukuk later than September, Rahmat Waluyanto, director general at the finance ministry’s debt management office, said in Jakarta. Indonesia doesn’t have urgent funding needs and is looking for the right timing for the sale because of global market conditions, Waluyanto said. The government will sell a “maximum” of $1 billion of Islamic bonds, Finance Minister Agus Martowardojo said Aug. 23.

SAUDI ARAMCO TOTAL REFINING & PETROCHEMICAL CO.: A joint venture oil refinery between Saudi Aramco and Total SA, known as Satorp, started selling 3.75 billion riyals ($1 billion) of Islamic bonds to Saudi investors from Sept. 13. Satorp’s sukuk will mature about 14 years from the date of completion, according to Usman Sikandar, co-head of investment banking at Calyon Saudi Fransi Ltd. The sale will be completed on Oct. 8.

PALESTINE MONETARY AUTHORITY: The central bank plans to issue $50 million of Islamic debt this year, Jihad Al Wazir, governor of the Palestine Monetary Authority, said in an interview.

AL HILAL BANK: The state-owned lender in the United Arab Emirates plans to raise $500 million from the sale of Islamic bonds in the fourth quarter, Mohamed Berro, the chief executive officer, said in an interview. The offering is part of a $2.5 billion sukuk program set up by the Abu Dhabi government- controlled Islamic bank, he said.

KUALA LUMPUR KEPONG BHD. (KLK) : The Malaysian palm oil producer plans to sell as much as 300 million ringgit of Shariah- compliant bonds under a medium-term program, it said in a stock exchange filing. CIMB Investment Bank Bhd. and Maybank Investment Bank Bhd. will be principal advisers, the company said.

EMERY OLEOCHEMICALS GROUP: The producer of plastic additives is proceeding with plans to sell 480 million ringgit of Islamic bonds in the fourth quarter, CEO Dr. Kongkrapan Intarajang said. Emery is a joint venture between PTT Chemical International Private Ltd., a unit of PTT Chemical Pcl, and Sime Darby Plantation Sdn., owned by Malaysia’s Sime Darby Bhd.

PT BANK MUAMALAT INDONESIA: Indonesia’s second-largest Islamic bank will sell $50 million of dollar-denominated sukuk with a maturity of not more than five years in 2011, Hendiarto, chief financial officer at the bank, told reporters on July 21. The lender is also planning to sell 800 billion rupiah ($89 million) of local currency Islamic bonds, Hendiarto said.

INTERNATIONAL ISLAMIC LIQUIDITY MANAGEMENT CORP.: The global institution set up by central banks from countries including Malaysia and Bahrain plans to sell $200 million to $300 million of short-term Islamic bills before the end of 2011, Chief Executive Officer Mahmoud AbuShamma said in an interview. The first issuance will likely have a maturity of three months and will be denominated in dollars, he said. IILM will also sell Shariah-compliant bonds maturing in more than five years, AbuShamma said, declining to give a timeframe.

ACWA POWER INTERNATIONAL: The Saudi Arabia-based developer of electricity and water projects may sell $300 million of Islamic debt next year, CEO Paddy Padmanathan said in Dubai. The company is seeking funds for utility investments.

AL BARAKA BANK EGYPT ESC: The Cairo-based Islamic unit of Albaraka Banking Group (BARKA) BSC expects to raise 1 billion Egyptian pounds ($168 million) from the sale of 10-year Islamic bonds, Manama-based CEO Adnan Ahmed Yousif said in an interview. Albaraka Banking Group, Bahrain’s biggest publicly traded lender, may sell $300 million of Islamic bonds in September once confidence in the region is restored, Yousif reiterated in a June 1 interview.

ISLAMIC BANK OF THAILAND: The state-owned lender may sell $150 million of Shariah-compliant bonds overseas by the end of this year, Dheerasak Suwannayos, president of the Bangkok-based bank, said in an interview on June 29. The bank also plans to raise 5 billion baht ($163 million) in the country’s first domestic sale of sukuk in the third quarter, he said. Three real-estate firms also plan to sell as much as $500 million of notes, he said on Feb. 17.

JORDAN: Jordan’s government plans to sell as much as $750 million of Shariah-compliant debt to finance its budget deficit and fund infrastructure projects, said Finance Minister Mohammad Abu Hammour.

NIGERIA: Nigeria wants to sell its first Shariah-compliant bonds within 18 months as sub-Saharan Africa’s second-largest economy aims to become a “hub of Islamic finance” in the region, central bank Governor Lamido Sanusi said.

KENCANA PETROLEUM BHD. (KEPB): The Malaysian oil and gas services company is planning 350 million ringgit of five-year sukuk with detachable warrants, and a second five-year Islamic bond of 700 million ringgit, RAM Rating Services said in a report.

SENEGAL: The West African nation’s $200 million sukuk to be sold later this year will be used for budgetary support, said Finance Minister Abdoulaye Diop. “We simply want to experiment, to diversify our sources of income,” Diop said.

RUSSIA: Executives from OAO Gazprombank, the lending arm of gas export monopoly OAO Gazprom, are seeking support for issuance of Islamic bonds by as many as five companies, Alexander Kazakov, director of structured and syndicated finance at the bank, said in an interview in Jakarta. Tatarstan, a Muslim-majority Russian republic, will announce a dollar- denominated sale soon, according to Kuala Lumpur-based adviser AmanahRaya Investment Bank Ltd.

PT BANK SYARIAH BRI: The Islamic banking arm of Indonesia’s second-largest lender by assets may sell sukuk in the next one to two years to support expansion, President Director Ventje Rahardjo told reporters in Jakarta.

EGYPT: The North African country’s financial markets regulator agreed in principle on a law allowing for the sale and trade of Islamic bonds, the Egyptian Financial Supervisory Authority said in a statement on its website. The draft law will be discussed with “experts” before it is sent to the cabinet for approval, it said.

ALBARAKA TURK KATILIM BANKASI AS (ALBRK): The Istanbul-based lender hired banks to sell $180 million of sukuk outside Turkey, CEO Fahrettin Yahsi said in an interview. Islamic banks in Turkey may sell as much as $1 billion of sukuk this year, Yahsi told Bloomberg HT television May 30.

ISLAMIC DEVELOPMENT BANK: The Jeddah-based multilateral lender may sell another $700 million of Islamic bonds following the “success” of a sale on May 18, Abdul Aziz Al Hinai, the vice president of finance, said in an interview. The sukuk will most likely be sold next year, according to Zakky Bantan, an executive at the Treasury department. The bank may also issue Saudi riyal-denominated Islamic debt, Bantan said, declining to provide further details.

KAZAKHSTAN: The government may sell at least $500 million of Islamic bonds once parliament approves a law on Islamic finance, Finance Minister Bolat Zhamishev said in an interview in the capital Astana.

POH KONG HOLDINGS BHD. (PKH): The Malaysian jewelry maker plans to sell 150 million ringgit of Islamic debt, which will be backed by Danajamin Nasional Bhd., a state bond guarantee agency, the company said in a Kuala Lumpur exchange filing.

SAUDI ELECTRICITY CO. (SECO): The state-owned utility may sell as much as $1.5 billion in Islamic bonds by the end of this year or early 2012, CEO Ali Al-Barrak told reporters at a conference in Dubai.

QATAR INTERNATIONAL ISLAMIC BANK (QIIK): The Persian Gulf country’s biggest Shariah-compliant lender plans to sell sukuk this year to help reduce debt payments, acting CEO Ahmed Meshari said in an interview May 12. The bonds will have a maturity of more than five years, Meshari said without giving details on the size and currency of issuance.

NU SENTRAL SDN.: The joint venture between Malaysian Resources Corp. and Pelaburan Hartanah Bhd. will offer as much as 600 million ringgit of Shariah-compliant notes, the company said in a statement. The proceeds will be used as an advance lease payment on a shopping mall under construction in Kuala Lumpur, according to the statement.

TOURISM DEVELOPMENT & INVESTMENT CO.: The Abu Dhabi government-backed developer of hotels and museums may sell bonds with maturities of seven to 10 years in 2011 to finance projects, Director of Finance Wallace Long said. The debt may be conventional or Islamic, he said.

ABU DHABI ISLAMIC BANK (ADIB) PJSC: The United Arab Emirates’ second-biggest Shariah-compliant lender may sell Islamic bonds by the end of this year to help repay an $800 million sukuk that matures in December, CEO Tirad Mahmoud said at a news conference.


MASRAF AL RAYAN (MARK): Qatar’s second-largest Islamic bank plans to sell as much as $1 billion of sukuk in the fourth quarter after its board received shareholder approval, Chairman Hussain Ali Al-Abdalla said.

TURKIYE FINANS KATILIM BANKASI AS: The Turkish bank owned by the National Commercial Bank of Saudi Arabia plans to sell at least $300 million of Islamic bonds this year, chief executive Yunus Nacar said. Turkiye Finans will sell the securities in the second half, Nacar said.

KUVEYT TURK KATILIM BANKASI AS: The Turkish unit of Kuwait Finance House (KFIN) KSC plans to sell five-year sukuk, Ufuk Uyan, the bank’s CEO said, without elaborating on when the offering will take place. Uyan said in August 2010 the Istanbul-based lender would sell more than $100 million of sukuk in 2012.

SOUTH AFRICA: The biggest African economy will amend legislation to allow the government to sell Islamic bonds to finance spending, Lungisa Fuzile, head of asset and liability management at the Treasury, said in an interview in Cape Town.

FRANCE: The country’s first Islamic bond may be sold in 2011 after the government introduces guidelines for sukuk offerings, said Thierry Dissaux, chief executive officer of the French Deposit Guarantee Fund. The debt may be in dollars and euros, he said.


To contact the reporter on this story: Khalid Qayum in Singapore at [email protected]

To contact the editor responsible for this story: Sandy Hendry at [email protected]