Qatar Islamic prepares for securitisation
Qatar Islamic Bank (QIB) has appointed HSBC and Rasameel, a Kuwaiti Islamic structured finance adviser, to conduct a review of its assets for a potential $300 million securitisation.
If the deal goes ahead, it will be the first bank securitisation in the Middle East.
The deal, which is also expected to be the first securitisation for any company in Qatar, will be Islamically structured, and forms part of the bank's attempts to diversify its funding streams. The long-dated funds will be used to fund project finance opportunities in QIB's home market and support real estate and foreign investments.
A source close to the deal says the transaction is likely to include a single tranche of debt, but it is still awaiting approval from the Qatar Central Bank and the bank's own sharia board.
The source adds that the securitisation review will establish which assets will be involved in the securitisation and the timeframe of the issuance. It will also determine the exact size of the transaction, which is expected to be in the range of $150 million-300 million.
The bank says it hopes the deal will help encourage more Islamic securitisation among Middle East financial services institutions.
After being slow to develop, securitisation is becoming increasingly popular in the region. It involves moving assets into a vehicle that cannot be seized in the event of bankruptcy. This lowers the risk for investors, and therefore interest rates.
Qatar Islamic Bank (QIB) has appointed HSBC and Rasameel, a Kuwaiti Islamic structured finance adviser, to conduct a review of its assets for a potential $300 million securitisation.
If the deal goes ahead, it will be the first bank securitisation in the Middle East. The deal, which is also expected to be the first securitisation for any company in Qatar, will be Islamically structured, and forms part of the bank's attempts to diversify its funding streams. The long-dated funds will be used to fund project finance opportunities in QIB's home market and support real estate and foreign investments. A source close to the deal says the transaction is likely to include a single tranche of debt, but it is still awaiting approval from the Qatar Central Bank and the bank's own sharia board. The source adds that the securitisation review will establish which assets will be involved in the securitisation and the timeframe of the issuance. It will also determine the exact size of the transaction, which is expected to be in the range of $150 million-300 million. The bank says it hopes the deal will help encourage more Islamic securitisation among Middle East financial services institutions. After being slow to develop, securitisation is becoming increasingly popular in the region. It involves moving assets into a vehicle that cannot be seized in the event of bankruptcy. This lowers the risk for investors, and therefore interest rates.This content is only available to full MEED package subscribers (MEED magazine and MEED.com).
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