Details of world's biggest USD750 million Islamic bond to be unveiled

The landmark US$750 million Islamic bond (Sukuk) is to be issued in the near future by Dubai Civil Aviation Authority as part of the huge US$4.1 billion expansion of Dubai international airport, United Arab Emirates.

The five-year Islamic Ijara Sukuk will be listed on the Dubai Financial Market and Dubai Islamic Bank are lead managers, arrangers and bookrunners for the Sukuk that is to be issued "in the very near future," according to the bank.

Dr Hussain Hamed Hassan, Head of the Shariah Supervision Board of Dubai Islamic Bank, will be revealing details of the Sukuk when he speaks on the opening day of the International Islamic Finance Forum in Istanbul, Turkey, on Monday, 28 September.

His audience will be made up of around 400 of the Islamic finance practitioners from more than 50 countries gathered for the most important international networking event in the calendar of this fast-growing finance sector (www.iiff.com).

His Excellency Dr Mohammed Khalfan Bin Kharbash, UAE Minister of State for Finance and Industry and Chairman of Dubai Islamic Bank, recently emphasised the need to strengthen the UAE financial markets with instruments such as Sukuks to bolster domestic liquidity and attract foreign direct investment.

Sukuk structures are a type of securitisation backed by assets acceptable under Islamic techniques of financing which prohibit interest.

Commonly known as an Islamic debt market instrument, Sukuks have been gaining popularity among investors. Sukuks are Shariah compliant, tradeable and fairly easily liquidated. For these reasons they have generated interest not only among Islamic Investors but also the conventional sector.

With opportunities for Shariah compliant investments currently few, Islamic investors have tended to buy and hold which has held back the development of an active secondary market. Critical mass has to be reached before an active secondary market can thrive.

Recent Issues of sovereign Sukuks from Malaysia, Bahrain and Qatar met with acclaim. The popularity of Sukuks is now spreading to corporate issuers, a move that is seen as further developing a capital market.

Including the Dubai Civil Aviation Sukuk of $750 million, the total Sukuk market stands at around $3.5 billion to date.

The international Islamic finance industry has been growing at a projected rate of 15% a year and is currently estimated to be worth something in excess of US$300 billion as new Islamically-compliant financial instruments and products are introduced.