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Mon 14 Nov 2011 08:40 PM

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Abu Dhabi's Al Hilal picks banks for $500m sukuk

Deal for Islamic lender expected to emerge in the first quarter of 2012, says source

Abu Dhabi's Al Hilal picks banks for $500m sukuk
Al Hilal Bank CEO Mohamed Berro. (ITP Images)

Abu Dhabi's Al Hilal Bank has picked three banks to arrange its debut Islamic bond, or sukuk, three sources familiar with the matter said on Monday, with the deal expected to emerge in the first quarter of 2012, one of them added.

Standard Chartered, HSBC and National Bank of Abu Dhabi have been mandated by unlisted Al Hilal for a benchmark-sized deal under a bond programme which could be worth up to $3bn, one source with knowledge of the matter said.

The Islamic lender, wholly-owned by the Abu Dhabi Investment Council (ADIC), is in the process of getting ratings for the bank and the potential notes, and expects this to be completed before the year-end, said the source.

"The bank is looking at a programme of $1 to $3bn in total, the first tranche will be $500m with an issuance likely in first quarter 2012," the source said, asking not to be identified as the information was not yet public.

Set up in 2008, the bank earned its first profit of AED140m ($38.12m) in 2010. The lender was one of two Abu Dhabi banks to subscribe to a $5bn bond under the Dubai government's $20bn bond programme late in 2009, during the Dubai's debt crisis.

Al Hilal has an authorised capital of AED4bn and a paid-up capital of AED2bn. It also set up Kazakhstan's first Islamic bank last year.

Two other Abu Dhabi banks are seen issuing a sukuk before the end of the year.

Abu Dhabi Commercial Bank has picked banks for an Islamic bond which could launch this week, and Abu Dhabi Islamic Bank kicks off roadshows later this week for a potential benchmark-sized bond. A benchmark bond is usually $500m.

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