Kuwait's Abyaar to seek $1bn in Islamic bonds

Kuwait-based Abyaar Real Estate Development Co said on Sunday it was gearing up to sell as much as $1 billion (Dh3.67 billion) of Islamic bonds, or sukuk, this year to finance expansion into Asia and the Gulf.

Abyaar is in talks with Merrill Lynch to issue Islamic bonds worth $500 million (Dh1.84 billion) Islamic bond to finance a project in Dubai, a company official told Reuters.

The developer, which is planning a secondary listing in Dubai this year, is also negotiating with NBD Investment Bank, a unit of Emirates NBD, to issue sukuk worth between $300 to $500 million (Dh1.1 to Dh1.84 billion), said the official. He declined to give a timeframe.

Vice-president Marzouq al-Rashdan told Reuters in October the firm planned to raise $700 million (Dh2.57 billion) through a five-year Islamic bond, structured as a murabaha contract. Merrill Lynch was advising on the sale, Rashdan said then.

Abyaar was also considering selling $300 million (Dh1.1 billion) of bonds later in 2008 for a separate project, Rashdan has said.

In murabaha deals a financier, such as a bank, buys a commodity and sells it to the customer at a higher price, complying with Islam's ban on lending on interest.  (Reuters)