* Raises $750 mln via Islamic bond sale
* Ten-year deal priced at 182.5 bps over midswaps
* Attracts orders worth $5.4 bln
(Recasts, updates details, context, quotes)
By Archana Narayanan
DUBAI, June 11 Emaar Malls Group, a division of
Dubai's Emaar Properties, raised $750 million on
Wednesday via a debut Islamic bond issue and was able to drive
down the cost of the deal due to strong investor demand.
The 10-year sukuk received orders worth more than $5.4
billion, showing the growing attraction of investing in the
region as its economy recovers from the after effects of the
financial crisis and other emerging markets suffer from
political and economic problems.
Emaar Malls, whose main asset is Dubai Mall, one of the
largest shopping complexes in the world, is also expected to
sell a quarter of its shares to the public when it lists on the
Dubai stock market later this year.
The company's sukuk was priced at a profit rate of 4.564
percent and a spread of 182.5 basis points over midswaps,
according to a document from lead managers on the deal.
Initial price thoughts for the bond were in the area of 200
bps early on Tuesday, but the spread was trimmed three times due
to the strong demand.
This level of interest allowed Emaar Malls to sell the sukuk
with almost no new issue premium, which is designed to attract
investors to buy new bonds from a borrower.
"The new issue premium has shrunk considerably - I would
have preferred it (the spread) around 190 bps," the investment
head of a Dubai-based asset management firm said, speaking on
condition of anonymity as he was not allowed to talk to media.
The deal's pricing also showed that Emaar Malls can borrow
more cheaply than its parent.
"The Emaar (Properties) 2019 sukuk is trading at around 170
bps so a five-year maturity extension does not look rewarded by
a 12.5 bps pick up," said a senior Gulf-based banker.
The deal also priced more tightly than some of Emaar Malls'
Investment Corporation of Dubai, which owns 29 percent of
Emaar Properties, raised $300 million in May via a ten-year bond
which was trading at around 199 bps over z-spread on Wednesday,
according to Thomson Reuters data.
A $500 million 10-year bond sold in April by Majid Al
Futtaim, the Dubai-based malls operator, was trading at around
192 bps over z-spread.
Bookrunners for the Emaar Malls deal were Al Hilal Bank, Abu
Dhabi Islamic Bank, Dubai Islamic Bank,
Emirates NBD, First Gulf Bank, Mashreq
, Morgan Stanley, National Bank of Abu Dhabi
, Noor Bank and Standard Chartered.
(Editing by Andrew Torchia, David French and Jane Merriman)