Dubai Islamic Bank (DIB) has shortlisted five banks for sukuk, an Islamic bond, othat will be issued at the end of May, Reuters quoted three anonymous sources as saying on Tuesday.
The Islamic lender has mandated Deutsche Bank, Emirates NBD, HSBC, National Bank of Abu Dhabi, and itself for the deal, the report claimed.
One of the sources told Reuters that the sukuk was likely to be a five-year benchmark-sized issue. Benchmark usually means at least $500m.
DIB did not comment on the report.
Analysts believe the bank hopes to benefit from strong regional interest and significant global Islamic liquidity while issuing the sukuk bonds.
Dubai Islamic Bank tapped debt markets in 2007 with a $750m sukuk financed by top global banks like Barclays, Citi and Standard Chartered. DIB repaid the bond earlier this year.
The Dubai lender also fully guaranteed a $300m sukuk issued by its Islamic mortgage unit Tamweel in January.
Abu Dhabi’s First Gulf Bank and Dubai’s Emirates Islamic Bank have also issued sukuk earlier this year. Reports suggest Banque Saudi Fransi is currently holding meetings of investors ahead of a potential sukuk issue.
“We expect more (regional) banks to come to market this year, because of European banks deleveraging. A lot of these regional banks need to get term money, which they can through the bond markets,” an analyst said on condition of anonymity.
DIB shares have gone up about 2.5% this year, after registering an 11% decrease in 2011.