Qatar International Islamic Bank readies $2 bln sukuk programme

DUBAI, Oct 10 (Reuters) - Qatar International Islamic Bank has finished creating a $2 billion sukuk issuance programme and is preparing to issue its first bond from the scheme when market conditions improve, a source familiar with the matter told Reuters.

The source did not elaborate on the timing of the first issue. Qatari borrowers’ access to international bond markets has become trickier since Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and transport ties with Qatar in June.

Qatari banks have steered clear of public debt markets since the crisis erupted, largely because of the risk that it might affect investor demand and pricing. Instead, banks have turned to privately placed bond and sukuk deals, as well as bilateral loans, to secure funding.

QNB Capital, the investment banking arm of Qatar National Bank, Citigroup and Standard Chartered were hired before the crisis began to arrange QIIB’s sukuk programme, which has been listed on the London Stock Exchange, the source said. QIIB is Qatar’s third-largest listed Islamic bank by assets.

Qatari banks are facing greater urgency to secure funding since the crisis began because banks from the four Arab countries have been withdrawing deposits from Qatar.

Last month the largest Qatari lender, Qatar National Bank , raised $630 million in Taiwan’s Formosa bond market. Qatar’s third-largest lender, Commercial Bank of Qatar , is considering whether to borrow money on the Taiwanese bond market, its group chief executive told Reuters late last month. (Additional reporting by Davide Barbuscia; Editing by Andrew Torchia/Jeremy Gaunt)