Rakia bond goes ahead with steep pricing

27 November 2007
Ras A-Khaimah Investment Authority (Rakia) has priced $325m of Islamic bonds at 150 basis points over London interbank offered rate (libor), making it even more expensive than Dubai Electricity and Water Authority’s (Dewa) sukuk, which was pulled for being too expensive.

Pricing on the Rakia sukuk was even more expensive than the average spread on the HSBC-DIFX Islamic bond index for the month of October, which was 125 basis points.

Rakia was advised by HSBC, Credit Suisse and Emirates NBD.

Dewa’s bond was priced at 100 basis points before the company decided to wait for better market conditions, indicating it is considered a better creditor than Rakia.

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