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World's Largest Islamic Bond Lists On DIFX

by Lorys Charalambous, Tax-News.com, Cyprus

18 December 2006


Nakheel, a member of Dubai World, has listed the world's largest Sukuk (Islamic-compliant bond) on the Dubai International Financial Exchange (DIFX), confirming the exchange’s stature as the largest exchange in the world for Sukuk by listed value.

The Sukuk, issued by Nakheel with Barclays Capital and Dubai Islamic Bank PJSC as the joint Lead Managers and Joint Bookrunners for the offering, achieved record participation totalling $3.52 billion. It comes with specific subscription rights to invest in any future Public Share Offerings by The Nakheel Group.

Commenting on the listing, Sultan Ahmed Bin Sulayem, the Executive Chairman of Nakheel, said: “As a global leader in property development, Nakheel will attract the confidence of investors both through its issue of this landmark Sukuk and its listing on an international exchange. The company is a leader in property innovation.”

Dr Omar Bin Sulaiman, Governor of the Dubai International Financial Centre (DIFC), added: “As I highlighted at the DIFC annual celebrations two weeks ago, the DIFC is set to become the leading global centre for Islamic finance. This landmark listing is an important step along the path to achieving this objective and underlines our commitment to the development of this sector.”

The Nakheel Sukuk is the largest listing of its type anywhere in the world. The listing brings the value of Sukuk on the DIFX to $7.63 billion, nearly twice as much the total on any other exchange. It also raises the value of Sukuk on the DIFX to 44% of the total listed on all exchanges globally. The value of Sukuk issued globally this year is $23.1 billion, an increase of more than 90% from 2005.

The DIFX is also home to the world's second largest Sukuk, a $3.5 billion offering by Dubai Ports, Customs and Free Zone Corporation (PCFC) that listed in January 2006.

"This is a ringing endorsement of the market’s confidence in the company and is an important step in the evolution of Nakheel as one of the world’s leading property developers, as the DIFX has been designed as the leading exchange not only for Islamic products, but for shares and other securities as well," stated Kar Tung Quek, Chief Financial Officer of Nakheel.

Per E. Larsson, Chief Executive of the DIFX said that Islamic securities sector is expanding rapidly worldwide, and the DIFX is at the centre of this growth.

“We are delighted to welcome the world’s largest Sukuk from Nakheel, bringing the value of the DIFX’s listed Sukuk to nearly twice as much as any other exchange," noted Larsson.

Hamed Ali, Executive Officer of the DIFX, added: "The DIFX offers issuers the visibility and high profile that come with listing on an exchange that is based in the Middle East, regulated to international standards, and closely connected to the regional and international financial services community."

The allocation of the Sukuk was mainly to European investors (40%) and Middle Eastern investors (38%).


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