Abyaar seeks credit rating for bond sale

BOND SALE: Kuwait developer looks to tap bond market to finance Gulf expansion plans. (Getty Images)

Kuwait's Abyaar Real Estate Development is in the process of getting a credit rating to help it sell as much as $500 million of Islamic bonds, or sukuk, to finance expansion plans in the Gulf.

Abyaar is in talks with NBD Investment Bank, a unit of Emirates NBD, to issue corporate sukuks worth between $250 to $500 million, the company's vice-president Marzouq al-Rashdan told Reuters by telephone.

The developer also plans to issue a sukuk worth $500 million to finance a project in Dubai, he said. Merill Lynch is advising on the sale.

"We need (the rating) for the sukuk... but for the project sukuk there is no need for a rating," he said. "The picture will be more clear on the sukuk in May," he said declining to give more details.

Rashdan told Reuters in October the firm planned to raise $700 million through a five-year Islamic bond, structured as a murabaha contract.

In murabaha deals a financier, such as a bank, buys a commodity and sells it to the customer at a higher price, complying with Islam's ban on lending on interest.

Abyaar wants to sell the bonds to fund the company's expansion plans in the region. It also arranging loan facilities with Dubai Islamic Bank, Emirates Islamic Bank, Kuwait's Global Investment House and Rasameel Structured Finance, Rashdan said, without elaborating.

"(We need) to buy land in Dubai," he said.

The firm said in February it planned a secondary listing in Dubai by the end of June.

"We hope that our listing will be by the end of the second quarter," said Rashdan.

"Hundred percent of our projects are in Dubai," he said. "It is the most important area for us as an investment."

Abyaar said on Wednesday it had agreed a joint venture with French fashion house Christian Lacroix to develop a residential tower in Dubai.

Abyaar has said it wants to expand in Saudi Arabia, Qatar and is seeking opportunities in Turkey, Malaysia and Singapore. (Reuters)

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