Islamic mortgage provider to enter debt market again

Mon, 15 Aug 2011
Islamic mortgage provider Tamweel has entered the debt market again for the first time in three years, it has been revealed.

According to gulfnews.com, the lender is reacting to the demand for Islamic bonds, which is keeping costs at close to a six-year-low.

The Dubai Islamic Bank-owned firm is to issue either a sukuk or mortgage-backed security towards the end of 2011 to help create a long-term financing pipeline and aid its expansion.

Acting chief executive officer Varun Sood explained that the time is right to be re-entering the debt market, despite the recent financial upheaval.

"Maybe there would be some impact on pricing, but there's still demand for Islamic financing instruments," he told the online resource.

According to the HSBC/Nasdaq Dubai GCC US Dollar Sukuk Index, the average yield on sukuks in Dubai has fallen 0.07 percentage points to 3.92 per cent in the past month.

Tamweel was able to start offering mortgages again in November 2010 after Dubai Islamic Bank upped its stake to 58 per cent and provided more funding options.

Islamic mortgages offer clients the chance to eventually own their own home, without contravening religious laws prohibiting the paying or receiving of interest.
Salaam-u-Allaikum
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