Turkish participation bank Kuveyt Turk has sold a debut deal of ringgit-denominated sukuk, or Islamic bonds, and has applied for a new 1 billion lira ($376 million) deal, as the lender looks to secure lower-cost financing.
Kuveyt Turk, 62 percent owned by Kuwait Finance House , would sell the lira-denominated deal to qualified investors via its asset-leasing company, KT Kira Sertifikalari Varlik Kiralama, according to Turkey's Capital Markets Board.
In a separate statement, the bank said it had raised 300 million ringgit via a five-year sukuk, its first issuance under a 2 billion ringgit programme.
The ringgit sukuk pays an annual yield of 5.8 percent, with the proceeds swapped into dollars to reduce the bank's funding costs to 4.4 percent, the statement said.
This marks the lender's first foray into the Malaysian Islamic debt capital market, which has attracted a range of foreign issuers thanks to an accommodative tax regime and strong demand from local investors for ringgit-deonominated paper.
In July, Turkiye Finans became the first Turkish lender to issue ringgit-denominated sukuk in Malaysia when it raised 800 million ringgit from a 3 billion ringgit programme it set up in June.
(Reuters / 28 April 2015)
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com