Islamic
mortgage lender Tamweel, badly hit by the global financial crisis and the
region’s property bust, has set up a $1bn bond programme, according to a base
prospectus.
Tamweel
will complete investor meetings in London on Monday, along with its parent
company Dubai Islamic Bank, after which it may issue an Islamic bond, or sukuk,
guaranteed by DIB.
Standard
Chartered, Citi and DIB itself are the arrangers and dealers on the programme,
according to the prospectus, which is dated Nov 30 and obtained by Reuters.
Bond
investors would have demanded a high premium on Tamweel bonds, without a
guarantee from DIB. The Islamic lender ran into trouble when Dubai’s real
estate sector collapsed in 2008 and its shares were halted for more than two
years, only resuming trade last May.
Last
year, DIB raised its stake in Tamweel to 57.33 percent in 2010, effectively
rendering the mortgage lender a subsidiary of the bank and raising investor
confidence in Tamweel.
Tamweel’s
acting chief executive said in September it hoped to raise between $300m to
$500m from a sukuk in the fourth quarter.
Tamweel
was at one point expected to merge with rival Amlak. Amlak shares remain suspended,
pending a decision by the government on its future.
Tamweel
shares ended 1.4 percent lower on Monday.
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