Tamweel in debt market for first time since 2008

Tamweel PJSC, the mortgage company majority owned by Dubai Islamic Bank PJSC, plans to tap the debt market this year for the first time since 2008 as demand for Islamic bonds keeps borrowing costs near six-year lows. Tamweel will issue either a benchmark-sized sukuk or a mortgage-backed security in the fourth quarter to create a, \"long-term financing pipeline to repay liabilities and grow the business,\" acting chief executive officer Varun Sood said. Tamweel has appointed banks for the transaction, he said, declining to identify them. \"We\'re being advised that it\'s a good time to go to the market in spite of the financial turmoil,\" he said in an interview at Tamweel\'s headquarters in Dubai yesterday. \"Maybe there would be some impact on pricing, but there\'s still demand for Islamic financing instruments.\" Islamic debt sales in the Gulf Cooperation Council jumped 51 per cent to $3.73 billion (Dh13.7 billion) so far this year compared with the year-earlier period, according to data compiled by Bloomberg. Article continues below The average yield on sukuk in the region fell seven basis points, or 0.07 percentage point, this month to 3.92 per cent yesterday, the HSBC/Nasdaq Dubai GCC US Dollar Sukuk Index shows. It dropped to 3.68 per cent on August 4, the lowest since February 2005. Tamweel, which along with fellow Islamic lender Amlak PJSC provided almost 90 per cent of all mortgages in the UAE, halted lending in October 2008 after the global credit crisis blocked their access to funds. The company resumed lending last November after Dubai Islamic Bank, the UAE\'s biggest bank that complies with Islamic banking rules, raised its stake in Tamweel to 58 per cent to help boost the mortgage market.