Gulf International Bank (GIB) has announced the establishment of a Malaysian ringgit 3.5 billion ($1.11 billion) Sukuk Al-Wakalah medium-term note (MTN) programme in Malaysia.
The Islamic MTN programme is based on the Shariah principle of Wakalah, said a bank statement.
CIMB Investment Bank Berhad and Standard Chartered Saadiq Berhad are the joint lead arrangers, while GIB Capital, GIB’s investment banking arm, is the international coordinator of the sukuk programme.
Malaysia-based RAM Ratings has assigned an indicative rating of AA1 to GIB’s Sukuk Programme, which will be conducted through a special purpose company, Gulf Sukuk I Company, said the statement.
The rating agency stated that GIB’s sukuk ratings “are underpinned by the strong financial support from its ultimate major shareholder—the government of the Kingdom of Saudi Arabia—which indirectly owns 97 per cent of the bank. The ratings also give credence to the bank’s entrenched wholesale-banking franchise within the Gulf Cooperation Council region, robust capitalisation levels and healthy liquidity position.”
GIB chairman Jammaz bin Abdullah Al-Suhaimi said: “The sukuk programme represents a strategic move to tap into the ringgit market in an effort to diversify funding avenues and currencies for the bank.”
A high-level delegation from GIB has recently undertaken a two-day road show in Kuala Lumpur to introduce the MTN programme and the bank to Malaysian investors.
“The road show was very successful and included intensive investor presentations. We are very pleased with the interest shown by these investors and expect an issuance of sukuk in the near future when the market conditions are convenient,” said Dr Yahya A Alyahya, GIB chief executive officer.
He added: “GIB will continue to monitor the market in the future to access funding opportunities, and this sukuk programme will allow the bank to further diversify its funding base and improve the maturity profile of its liabilities.”
GIB is a leading bank in the Middle East with its principal focus on the GCC states. Its primary shareholder is the Public Investment Fund of Saudi Arabia.
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