The five-year sukuk will finance expansion of Emaar’s activities, in particular the increasing mortgage portfolio of subsidiary Amlak Finance. The issue will be backed by Emaar-owned real estate assets, as is required for Sharia compliance.

In mid-October, Emaar announced net profits of AED 503 million ($137 million) for the first nine months of 2003. ‘We feel this is a good time to test the waters and go ahead with the sukuk issue,’ chairman Mohammed Alabar said in a statement. The sukuk will be marketed primarily in Bahrain and the UAE.

The mandate represents a step forward in the development of LMC, which was established in 2002 to develop instruments to ease the liquidity management problems faced by the Islamic banking community. LMC has also been mandated to lead arrange Lebanon’s debut sovereign sukuk, structured to fulfil Manama’s Paris II donors’ conference commitment to Beirut (MEED 24:10:03).

The tradable Islamic leasing instrument is becoming increasingly popular both among Islamic and conventional investors (MEED 24:10:03, Cover Story).

Doha’s recent sovereign issue was taken up 48 per cent by conventional investors.