Fixed Income
Achieving a desired asset allocation target in fixed income investments without exposure to interest-bearing securities is a challenge for many institutional investors. Guidance creates different types of fixed income assets as a solution to this structural problem: Shariah-compliant equipment leases through our leasing initiatives; corporate sukuk securities through our Capital Markets operations; and Shariah-compliant mortgages though our Housing Finance operations.
Guidance Capital Markets worked with Al Bayan Holding of Saudi to issue an Islamic bond in Malaysian ringgits, the first for a Saudi company. The issuance paves the way for more corporations from the Kingdom to tap into Malaysia’s Islamic Finance market, the world’s largest. Al Bayan issued RM 200 million in April 2013 that secured a AA3 rating from RAM Ratings, also a first for a Saudi company. This is the first tranche of a newly established RM1 billion programme for Al Bayan.
Guidance worked with ATEL Capital Group to develop a U.S. equipment leasing fund that was launched in July 2010. The fund invests in long-lived, business-critical equipment leased to U.S. Fortune 1000 companies.
In 2012 we launched a similar equipment leasing fund to invest in a portfolio of high-quality leased assets located in a number of GCC states.
In the mortgage sector, Guidance Residential, our consumer finance company that provides housing finance contracts to U.S. consumers, generates a substantial volume of mortgages each year. These fixed income assets are sold to conventional and Islamic investors and Guidance is investigating the feasibility of securitizing them for a wider range of international institutional investors.
We are studying as well the feasibility of utilizing mortgages generated by Dar Al Tamleek in Saudi Arabia for securitization in fixed income funds for investors.
We also are exploring other investment products that have similar attractive risk/return features, including possible new equipment leasing funds based on high quality leased assets located in Southeast Asian countries and mortgage assets from new origination businesses in Muslim countries.
Guidance Capital Markets (DIFC) Limited is incorporated as a company limited by shares under the laws of the Dubai International Financial Centre and is licensed and regulated by the Dubai Financial Services Authority (“DFSA”). Guidance Capital Markets (DIFC) Limited only deals with Professional Clients and not Retail Clients as defined by the DFSA.