UAE's Sorouh sets price guidance for securitisation

DUBAI, July 24 (Reuters) - United Arab Emirates developer Sorouh SOR.AD has set initial price guidance for its proposed 4 billion dirham ($1.09 billion) programme to sell asset-backed securities that comply with Islamic law, bankers said.

Sorouh priced the class A tranche worth 2.761 billion dirhams at 200 basis points over 1-month Emirates Interbank Offered Rate (EIBOR) 251 million dirhams class B tranche at 250 basis points over 1-month EIBOR and class C tranche, worth 1.004 billion dirhams at 350 basis points over 1-month EIBOR, bankers from two of the arrangers told Reuters.

Final pricing is expected in late July or early August, they said on Thursday.

Securitisation allows companies to package assets -- such as loans, rental properties or infrastructure projects -- and sell them to investors to transfer risk from their balance sheets, and free up funds for expansion.

The bonds, like traditional Islamic bonds known as sukuk, are asset backed. But unlike sukuk, they allow buyers direct access to the underlying asset.

The proceeds from the sukuk will be used by Sorouh to finance infrastructure projects.

(For Reuters content on Islamic finance, click on ISLAMIC)

(Reporting by John Irish; Editing by Inal Ersan)