Qatar developer to sell $150m Islamic bond

Salam Bounian will sell a 10-year Islamic bond to fund shopping mall construction.
Qatar developer to sell $150m Islamic bond
By Reuters
Thu 21 Jun 2007 02:58 PM

Qatar property developer Salam Bounian Development Co., a unit of Salam International, will sell a 10-year Islamic bond this year to raise $150 million, a bank managing the sale said on Thursday.

Salam Bounian will use the proceeds to build a shopping mall in its Gate development in the West Bay district of the capital Doha.

Initial price guidance on the bond is 190 basis points over the six-month London interbank offered rate for the first five years and 310 basis points for the next five, Selim Chami, head of structuring at Qatar Islamic Bank, told Reuters.

"There is a possibility of refinancing after the first five years," he said.

Qatar Islamic Bank is managing the sale with Qatar National Bank and Commercial Bank of Qatar.

The sukuk will be sold by September and may be listed in Bahrain or the on Dubai International Financial Exchange.

The cash raised will cover about 70% of mall's costs with Salam Bounian providing the rest.

The funds will be used to finance the construction of a mall in The Gate development in Doha's West Bay district.

The development will have two commercial office towers as well.

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