Bank Islam issues third tranche of RM700m subordinated Sukuk Murabahah

BANK Islam Malaysia Bhd has successfully issued the third tranche of its RM700 mil subordinated Sukuk Murabahah under its RM10 bil Sukuk Murabahah Programme today.

The Sukuk (Islamic bond) is the second subordinated sukuk issued by Bank Islam this year.

“It shall qualify as a Tier-2 regulatory capital of Bank Islam in compliance with Bank Negara Malaysia’s Capital Adequacy Framework for Islamic Banks (Capital Components),” the bank said in a statement.

“Hence, it will enhance the capital adequacy of Bank Islam in line with the Basel III requirements.”

According to Bank Islam, the Sukuk which is redeemable at their full nominal value upon maturity, comes with a call option on its fifth anniversary and is rated A1/stable by RAM Rating Services Bhd.

Bank Islam lodged its Sukuk Murabahah Programme with the Securities Commission on Sept 6, 2018. The bank has the flexibility to issue Subordinated Sukuk Murabahah and/or Senior Sukuk Murabahah during the programme’s availability period.

RAM Ratings has reaffirmed a final long-term rating of ‘A1/stable’ and ‘AA3/stable’ to the Subordinated Sukuk Murabahah and Senior Sukuk Murabahah respectively under the Sukuk Murabahah Programme.

Bank Islam is also the principal adviser, lead arranger, lead manager and shariah adviser for the Sukuk Murabahah Programme.

The programme issued its first tranche on Nov 7, 2018 amounting to RM300 mil, followed by the second tranche on March 26 this year with an amount of RM400 mil.

Historically, Bank Islam established its first Sukuk Programme in the form of Subordinated Sukuk Murabahah Programme of RM1 bil in three tranches in October 2014, according to Bank Islam chief executive officer Mohd Muazzam Mohamed.

“The bank issued the first tranche of RM300 mil in April 2015, the second tranche of RM400 mil in December 2015 and the third tranche of the programme amounting to RM300 mil in November 2017,” he added. – Oct 21, 2020

 

 

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