The emirate of Ras al-Khaimah is eyeing a return to the debt capital markets this year after inviting bankers to pitch for arranger roles on a potential U.S. dollar-denominated benchmark sukuk issue, sources said on Wednesday.
A deal from the emirate, one of seven which make up the United Arab Emirates, is expected before end-April, three of the sources said, speaking on condition of anonymity.
Benchmark size is traditionally understood to mean upwards of $500 million.
Issuance from Ras al-Khaimah has been rare as the fourth-largest emirate has been enjoying strong budget surpluses since 2009, helped by government-led construction projects and expansion of the tourism sector.
Any issue would be received well by investors as the emirate derives substantial support for being part of the UAE.
Last year, Ras al-Khaimah sent requests for proposals for an Islamic bond deal in June, around the same time that two other Gulf sovereigns, Sharjah and Bahrain, also started talks with bankers on potential bond deals. But unlike the other two, which printed deals, Ras al-Khaimah did not even appoint banks.
Ras al-Khaimah is rated A by Standard & Poor’s and Fitch Ratings; in November, S&P raised its outlook to stable from negative, citing improving reliability of its economic data.