"We’re looking at the portfolio and characteristics of our assets and from then onwards we can establish a specific timeframe, the issue size and what portion we will securitize," Salem Chami, head of structuring at QIB told Reuters, adding that sukuk models such as Ijara and Istisna would be under consideration. The Ijara sukuk is an agreement in which banks lease an asset to a client for a specific time at a specific price. The Istisna model means a purchaser asks the seller to create a product, which is then sold to the purchaser at a given price.
QIB’s securitization aims to serve the bank’s overseas expansion plans, which include new subsidiaries in Sudan and Pakistan and growing its operations in the local market especially in the real estate and infrastructure sectors, Chami said. The bank has hired Kuwait-based Islamic investment bank Rasameel Structured Finance Co. and an international investment bank, which it did not name, to advise it on the deal.
QIB chief executive Salah Al Jaidah said the bank was looking to tap into the increasing demand in sukuk offerings, which it expected to grow to $ 100 billion in the next five years from $ 27 billion in 2006.
