Tokyo: The rise of Asian ship finance gets ever more sophisticated in its offerings.
Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking have organized a syndicated loan of $184m for Brunei Gas Carriers (BGC). The loan complies with Sharia law, which prohibits the charging of interest. The loan is being paid to a special-purpose company that will buy LNG ships and lease them to BGC. Instead of interest, the Japanese banks will receive charter fees.
This is the second loan the two banks have made to BGC following a $170m syndicated loan from a year ago.
The Nikkei newspaper reports that Bank of Tokyo-Mitsubishi UFJ has set up a section specializing in Islamic financing at a local unit in Malaysia.
Also, Mizuho Financial Group gearing up to begin offering Islamic financing in Malaysia within the next couple of months.
Not to be left behind, Tokio Marine & Nichido Fire Insurance Co and Orix Corp are expanding their Islamic insurance and leasing businesses.