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Hong Leong Islamic Bank issues RM400 mln sukuk

| 07/06/2014 | 0 Comments
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KUALA LUMPUR: Hong Leong Islamic Bank Bhd (HLISB), which is focusing on further expansion, has successfully issued the first tranche of its subordinated Sukuk Ijarah amounting to RM400 million under a Subordinated Sukuk Ijarah Programme (Sukuk Programme).

In a statement released here yesterday, HLISB said the book was closed within one day of opening at 4.80 per cent per annum with a bid to cover ratio of 2.95 times.

The Sukuk Programme has a nominal value of up to RM1 billion and the first tranche was issued for 10 years, on a 10 non-callable five years basis.

Rated AA2 by RAM Holdings Bhd, the papers comply with international Shariah standards and are tradeable and transferable in the secondary market, said the statement.

“The structure is the first of its kind in the world, and based on the Ijarah principle featuring lease and sub-lease transactions where the underlying assets comprise Islamic Hire Purchase portfolios owned by HLISB.

It also complied with both Basel III and Tier-2 Capital requirements,” said its managing director and chief executive officer Raja Teh Maimunah Raja Abdul Aziz.

HLISB is focused on expanding its business, namely through personal financial services and business and corporate banking functions, as well as via its non-financing income streams as seen in its Islamic capital market and Islamic global market activities.

In addition to these, the bank also seeks to accelerate the development of its transactional and digital banking initiatives.

“The issuance demonstrates HLISB’s capabilities in creating innovative structures.

It is intended as a cost-efficient replacement for an existing capital facility as well as to provide fresh capital to continue driving growth,” she added.

Proceeds received from the Sukuk Programme would help ensure that HLISB remains adequately capitalised, supportive of future endeavours and expansion plans. — Bernama

Category: Business, Sarawak

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