Five join DCA sukuk deal

27 August 2004
Dubai Islamic Bank (DIB)has appointed five joint lead managers for the $750 million sukuk issue being arranged for Dubai's Department of Civil Aviation. DIB is acting as sole lead manager and global co-ordinator. The funds raised will be used to part-finance the $4,200 million expansion under way at Dubai International Airport (DIA - MEED 20:8:04).

It is understood that HSBC Amanah, Citi Islamic Investment Bank, Gulf International Bank, Standard Charteredand Kuwait Finance Housewill join DIB to fully underwrite the deal, following beauty contests in mid-August. Kick-off meetings have begun and roadshows are likely to be launched in October, taking in the GCC, Europe and the Far East.

'We expect strong interest in this transaction as it is essentially a sovereign borrowing, and the pricing should end up very competitive,' says a banker involved in the deal. 'And past sukuk issues - for Qatar and Malaysia for example - have shown that these instruments can attract interest as much from the conventional as the Islamic banking community.' The instrument is the largest ever sukuk issue.

The DIA expansion is moving forward, with bids due on 11 September for the biggest package so far tendered, AX 059, covering all architectural finishes and mechanical, electrical and plumbing (MEP) works for terminal three, the open-air car park structure and concourse two (MEED 6:8:04).

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