Al Faisal Holding, a Qatari conglomerate, is considering alternative debt funding options after the idea of a US dollar sukuk issue received a lukewarm response from the market, sources familiar with the situation said.
The conglomerate had approached banks earlier this year to discuss arranging a potential sukuk issue of around $200 million.
The issue, which would have been the company’s first international debt raising exercise, may now be replaced by a syndicated loan, the sources said.
A spokesman for the company said in an emailed response to Reuters that Al Faisal does not have any short-term plans to issue sukuk.
Al Faisal is always open to discussions about how best to fund its operations, the spokesman said.
The conglomerate’s potential sukuk issue would have been a privately placed, secured transaction, but market expectations for the deal were different, said one source familiar with the deal.
The source said potential investors had expected Al Faisal to make a more sizeable, unsecured sukuk issue with a structure similar to the $500 million debut sukuk issued by another Qatari company, Ezdan Holding, earlier this year.
Ezdan, which has recently closed a $460 million syndicated loan, issued its first sukuk in May. The five-year deal offered a 4.375 percent profit rate.
Al Faisal, founded in 1960 by Sheikh Faisal Bin Qassim Al Thani, does not have a credit rating. It operates in sectors including property development, entertainment, hospitality, education, transport, trading and international investment.