Bank Islam issues third tranche of Sukuk Murabahah worth RM700m

The sukuk, which is under its RM10.0 billion Sukuk Murabahah programme, is the second subordinated sukuk issued by Bank Islam this year. — Reuters pic
The sukuk, which is under its RM10.0 billion Sukuk Murabahah programme, is the second subordinated sukuk issued by Bank Islam this year. — Reuters pic

KUALA LUMPUR, Oct 21 — Bank Islam Malaysia Bhd has successfully issued the third tranche of RM700 million subordinated Sukuk Murabahah (sukuk) today.

The sukuk, which is under its RM10.0 billion Sukuk Murabahah programme, is the second subordinated sukuk issued by Bank Islam this year.

In a statement today, Bank Islam said the sukuk shall qualify as Tier 2 regulatory capital in compliance with Bank Negara Malaysia’s Capital Adequacy Framework for Islamic Banks (Capital Components), hence, will enhance the capital adequacy of Bank Islam in line with the Basel III requirements.

The sukuk, it said, is redeemable at its full nominal value upon maturity, and comes with a call option on its fifth anniversary and is rated A1/stable by RAM Rating Services Bhd.

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.

Meanwhile, Bank Islam chief executive officer Mohd Muazzam Mohamed said, under the sukuk programme, the bank issued its first tranche on November 7, 2018 amounting to RM300 million, followed by the second tranche on March 26, 2020 which amounted to RM400.0 million.

“Historically, Bank Islam established our first sukuk programme in the form of the subordinated Sukuk Murabahah programme of RM1.0 billion in three tranches in October 2014.

“The bank issued the first tranche of RM300 million in April 2015, the second tranche of RM400 million in December 2015, and the third tranche of the programme, amounting to RM300 million, in November 2017,” he said. — Bernama

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