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Just like it's not enough drama for Goldman Sachs - another sukuk and new doubts

Just like it's not enough drama for Goldman Sachs. In 2011 it's sukuk made headlines, being not exactly Shariah-compliant. Now what, another try in this high-growth area? Let's wait and see how it works this time.

Here is what Bloomberg reports:

Goldman Sachs Group Inc. (GS)is planning its first foray into Islamiccapital marketsthree years after starting a sukuk program that it never used.

Five banks including the New York-based lender will manage the dollar-denominated offering via JANY Sukuk Co., four people with knowledge of the deal said. A benchmark-sized sale may follow, they said, asking not to be identified as the plan is private. Goldman Sachs in 2011 created a $2 billion program that faced criticism from some Islamic advisers for not ensuring debt would be traded at par value, as required by Shariah.

Goldman Sachs is joining a growing number of issuers seeking to tap demand among Muslim investors in an industry that Ernst & Young LLP forecasts will double in the five years through 2018 to $3.4 trillion. The U.K. became the first non-Muslim country to issue Islamic bonds in June with a sale that lured bids for more than 10 times the amount offered. Luxembourg andHong Kongare also planning investor meetings for similar offerings.

“There’s so much pent up demand in the sukuk space,” Thomas Christie, the Dubai-based head of fixed income at Prometheus Capital Finance Ltd., said by phone. “Given the controversy in the past, it would be interesting to see what structure they’re going to use, how they’re going to use the funds and how the Islamic community reacts to it.”

The planned security will take the form of Sukuk al Wakala, a Shariah-compliant structure in which one party entrusts another to act on its behalf.

The lender established a sukuk program three years ago based on a so-called commodity murabaha structure, or a cost plus mark-up transaction, that was approved for listing on the Irish Stock Exchange by the Central Bank of Ireland. Murabaha certificates can only be bought and sold at par value because they represent a future claim on the underlying assets.

The program, blessed by eight of the world’s top Islamic scholars, became entangled in a debate on whether it met Shariah-compliant guidelines and over lack of clarity on how Goldman Sachs planned to use the funds it raised.