The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

A new market in convertible sukuks

Real estate convertibles are the hot ticket
Asian boom

Europe’s record breaker

While Europe has enjoyed a boom of real estate convertible issuance, the Middle East has come from nowhere to become a big market.

It started in January 2006 with a $3.5 billion pre-IPO convertible sukuk (Islamic law-compliant bond) for the Ports, Customs and Free Zone Corporation (PCFC), a subsidiary of DP Ports, the Dubai company which bought UK ports and ferries operator P&O in January 2006.

Other than the intrinsic merits of PCFC, the attraction for many investors was the ability to gain exposure to Middle Eastern stocks, many of which are either illiquid or have restrictions on foreign ownership. Investors in the two subsequent bonds – from real estate companies Nakheel, the property arm of Dubai’s DP World, in December 2006 and Abu Dhabi-based Aldar Properties in February this year – have had similar motives.

"Aldar, for example, traded just $4 million a day," notes Doug Decker, head of equity-linked origination at Barclays Capital, which was global coordinator on the deal with Credit Suisse and the National Bank of Abu Dhabi. "So to build up a $20 million position [in stock] would take a month.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree