Amlak Finance PJSC, the United Arab Emirates' biggest mortgage provider, said Thursday that it plans to sell Islamic bonds worth $272 million to help secure long-term funding and finance international expansion.
Emirates National Bonds and Finance is advising Amlak on the sale plan, which is awaiting regulatory approval, Amlak stated to the Dubai Financial Market.
Amlak on May 30 said it won approval to sell Islamic mortgages in Saudi Arabia and had applied to regulators in Syria, Turkey, Pakistan, and Morocco.
U.A.E. Central Bank Gov. Sultan Bin Nasser al-Suwaidi in April said Amlak might still secure a full banking license even after an initial application was rejected in March.
The mortgage provider is pursuing expansion into emerging real estate markets in the Middle East after first-quarter profit fell 35%, hurt by delayed home completions by developers in its domestic market of Dubai.
Sales of Islamic bonds, known as sukuk, grew nine times faster than international corporate bonds last year and twice as fast as the U.S. market for debt with ratings below investment grade. About $9.8 billion of sukuk have been sold this year so far, a 42% increase from the year earlier.
Muslim Shariah law forbids the payment or receipt of interest. Instead of paying a coupon, sukuk are typically backed by leases or sale-and-repurchase agreements.