DP World to sell sukuk to fund bond buyback

Business Tuesday 24/May/2016 14:25 PM
By: Times News Service
DP World to sell sukuk to fund bond buyback

Dubai: DP World, the Dubai-owned company that operates ports from China to South America, may sell Islamic bonds on Tuesday as it seeks cash to buy back existing securities.
The company set initial price guidance on the seven-year sukuk at about 262.5 basis points to 275 basis points above the benchmark midswap rate, according to a banker familiar with the deal, who asked not to be identified because the information is not public yet. The dollar-denominated securities are likely to be priced on Tuesday, he said.
Money raised from the sale will be used to fund an offer to buy up to $750 million of DP World’s existing 2017 sukuk and for general corporate purposes, the company said earlier this month. The tender offer for the 2017 securities, which will be purchased at $10,555 for every $10,000 of principal, also closes today and is aimed at reducing costs.
Bond sales from the six-nation Gulf Cooperation Council (GCC), which includes the two biggest Arab economies of Saudi Arabia and the United Arab Emirates, are accelerating as governments and companies seek funds following oil’s decline in the past two years. Offerings from the region have risen 28 per cent to $16.7 billion, while Qatar’s government, Abu Dhabi’s Etihad Airways and its partners as well as Dubai-based Noor Bank also plan to sell bonds this week.
Citigroup, Deutsche Bank, Dubai Islamic Bank, HSBC Holdings, Barclays, Emirates NBD Capital, First Gulf Bank, JPMorgan Chase, National Bank of Abu Dhabi and Societe Generale are helping arrange DP World’s issue. Noor Bank, Samba Financial Group and Union National Bank have also been appointed co-arrangers.