Siraj Capital eyes $250 mln U.S. Islamic bond sale

DUBAI, Nov 18 (Reuters) - Saudi Arabian-owned investment bank Siraj Capital said on Sunday it is in final negotiations to arrange a $250 million Islamic bond sale for a U.S.-based company.

The deal would be the second Islamic bond sale, or sukuk, for a U.S. entity after the $165 million sukuk sold by Texas-based East Cameron Gas Co earlier this year.

Siraj is hoping to win the mandate in the next few weeks, Siraj Chief Executive Officer Ibrahim Mardam-Bey told Reuters on the sidelines of a conference in Dubai.

"It is for an oil and gas company operating in South America and listed on the New York stock exchange," Bey said, declining to identify the firm. The funds would be used to partly finance exploration, Bey said.

"The credit crunch has forced chief financial officers of firms in the U.S. to look for alternative finance vehicles," said Bey. "A sukuk can do that and taps into the high liquidity in this region."

The majority of investors in the East Cameron transaction were New York-based hedge funds looking at diversifying their capital market portfolios, Bey said.

Islamic bonds comply with Islam's ban on the receipt of interest, and returns derived from underlying physical assets, such as rent from real estate, are paid to bondholders. (Reporting by John Irish; Editing by James Cordahi and David Holmes)