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Islamic Banker March 2013 final _IB_JanFeb 2010.qxd 17/04/2013 16:12 Page 4 Sukuk NEWS IN FOCUS bank asya issues debut Us$250m sukuk bANK ASyA US$250M FIxED RATE RESETTAbLE TIER 2 SUKUK saLient FeatURes at 28 maRch 2013 ISSUER AND TRUSTEE asya sUKUK comPany Limited, RegisteRed in the cayman isLands ObLIGOR banK asya DATE OF ISSUE 28 maRch 2013 SIZE OF ISSUE Us$250m FiXed Rate ResettabLe tieR 2 ceRtiFicates ISSUE TyPE hybRid iJaRah-cUmmURabaha sUKUK - asset PooL comPRises 51% tangi- bLes and 49% mURabaha ReceivabLes TENOR 10 yeaRs PROFIT FREqUENCy semi-annUaL ANNUAL DIVIDEND 7.5% PeR annUm COUPON RATE ISSUE PRICE 100% PROFIT PAyMENT semi-annUaL FREqUENCy USE OF PROCEEDS the PRoceeds oF the issUe oF the ceRtiFicates WiLL be Paid by the tRUstee on the cLosing date to the seLLeR as the PURchase PRice FoR the asset PoRtFoLio and to the ReLevant commodity bRoKeR as the PURchase PRice FoR the commodities. GOVERNING LAW LaWs oF cayman isLands, tURKey jOINT LEAD MANAGERS nationaL banK oF abU dhabi PJsc; hsbc banK PLc; meRRiLL Lynch inteRnationaL; emiRates nbd caPitaL Limited RATING ba3 - moody’s deUtschLand gmbh CLEARING AGENTS cLeaRstReam, eURocLeaR LISTING iRish stocK eXchange (oFFiciaL List) SOURCE: banK asya maRch 2013 bank asya has become the second turkish participation bank to raise funds from the international market through a debut 10-year Us$250m sukuk issuance in march 2013. the Us$250m Fixed Rate Resettable tier 2 certificates, according to bank asya, were issued by asya sukuk company Limited, a whollyowned special purpose vehicle registered in the cayman islands and sold to qualified investors residing outside of turkey. bank asya has the option of not paying the principal for at least five years. the annual dividend coupon rate is set at 7.5 per cent. the issuance, according to bank asya, attracted strong investor demand with some 52 per cent subscribed by investors in europe, 35 per cent in the middle east and 13 percent in asia. bank asya will use the proceeds partly to boost its tier ii capital and as such its capital adequacy ratio from 13 per cent to 16 per cent. the net proceeds of the issue of the certificates were applied by the issuer and the trustee on the closing date as follows: (a) not less than 51 per cent towards the purchase from bank asya of the tangible asset Portfolio comprising certain non-real estate assets (including related ijarah (lease) contracts and all rights under such contracts) and sukuk certificates; and (b) not more than 49 per cent. towards the purchase from a commodity broker of the shariah-compliant commodities (which shall be metals other than silver and gold traded on the over the counter market and may include metals traded on the London metal exchange) at spot price, which will be immediately sold to bank asya on immediate delivery but deferred payment terms at the deferred Payment Price, pursuant to the commodity murabaha agreement. the sukuk, which comprises effectively a hybrid sukuk al-ijarah and sukuk al murabaha and was jointly lead managed by national bank of abu dhabi PJsc, hsbc bank plc, merrill Lynch international and emirates nbd capital Limited, was assigned a ba3 rating by moody’s deutschaland gmbh and is listed on the irish stock exchange. this debut international sukuk follows the domestic turkish lira sukuk issued by bank asya in February 2013 - a tL125m 1-year sukuk issued through its whollyowned subsidiary, asya varlık Kiralama a.s. (asset Leasing company). the bank initially informed the turkish capital markets board that it intended to issue a 1-year sukuk totalling tL75m in nominal value, but if demand was strong it would raise the issuance amount to tL125m. another bank, Kuveyt turk Participation bank, according to ceo Ufuk Uyan, is also in the process of issuing its debut turkish lira sukuk. 206 4 Islamic banker march 2013 Rabi al-thani - Jumada awwal 1434 b A N K I N G I N b R I E F IDb US$446m Finance for Rabat the islamic development bank (idb) has extended development financing totaling Us$446m to morocco. the funding includes a Us$150m facility to finance the development of the Jorf Lasfar Port, south west of casablanca, on morocco’s atlantic coast, which will serve as the country’s main phosphate derivatives and fertilizers export transport outlet. the facility was extended to office chérifien des Phosphates (ocP), the world's largest exporter of phosphate rocks and derivative products. the idb has also extended a Us$200m financing facility towards the Upper sebou River Region power project which is expected to provide 170 extra megawatts of power in the north of the country and meet the 42 per cent rise in electricity demand by the year 2020. the project is part of morocco’s comprehensive development programme which also envisages increasing the volume of harnessing surface water for irrigation purposes and protecting the regions below the river at the time of seasonal floods. the multilateral also provided Us$84.8m for drinking water projects in eight regions of the country which is expected to further increase public access to drinking water; and contributed Us$11 million towards developing the rural roads network and helping eradicate poverty in those regions. since its inception in 1975, the idb group has approved Us$5.35bn of development financing for morocco in various sectors. in addition, the idb group has also financed numerous foreign trade operations in line with its efforts to promote intra-trade amongst member countries. bLME UK Realty Tops UK£240m bank of London and middle east (bLme) has arranged a 2-year UK£12m islamic financing for curzon asset management for the development of nine apartments in the London borough of Kensington. this latest transaction takes bLme’s current property financing portfolio in the UK to over UK£240m.
Islamic Banker March 2013 final _IB_JanFeb 2010.qxd 17/04/2013 16:12 Page 5 Domestic Sukuk cbQ issues debut Local currency sukuk CENTRAL bANK OF qATAR (Cbq) qR1bN SUKUK AL-IjARAH saLient FeatURes at 15 maRch 2013 the central bank of Qatar (cbQ) auctioned QR4bn of treasury papers comprising two tranches of conventional bonds (QR2bn and QR1bn tranches) and a QR1bn tranche of sukuk. this is the cbQ’s debut sovereign local currency sukuk issuance. according to the cbQ, the conventional tranches have a maturity of 3 months (QR2bn tranche) and 6 months (QR1bn tranche) and will pay a yield of 0.98 per cent and 1.07 per cent respectively; while the QR1bn sukuk tranche has a 9 months maturity and will pay a yield of 1.15 per cent. the tranches were all well over-subscribed by local Qatari banks to which the entire allocation was made. Qatar follows a spate of government treasury departments and central banks, including malaysia, bahrain, indonesia, Pakistan and turkey to offer domestic sukuk and shariah-compliant government notes to help islamic financial institutions in their jurisdictions to manage their domestic liquidity; to park their reserve requirements in shariahcompliant instruments; and to meet international liquidity requirements such as the new basel iii Liquidity coverage Ratios. not surprisingly, the central bank of Qatar has indicated that its local currency debt will be issued at regular intervals with varying maturities. depending on the structures, some of the domestic papers will carry a zero coupon or will pay low yields, because of the low interest rate and inflation environment and a country’s financial strength. but as bahrain’s sukuk al-salam has shown, banks have subscribed to them because of their diversification of investment in securities portfolio policies. one immediate impact could be that these domestic issuances may enhance options for domestic financing and reduce reliance on more costly foreign financing. islamic banker subscription Please send me Islamic banker Online magazine for one year Print in bLocK caPitaL letters NEWS IN FOCUS ISSUER centRaL banK oF QataR DATE OF ISSUE maRch 2013 SIZE OF ISSUE QR1bn oF a QR4bn issUance oF tReasURy PaPeRs Which incLUde tWo conventionaL tRanches oF QR2bn and QR1bn ResPectiveLy TENOR 9 months yIELD 1.15% USE OF PROCEEDS domestic LiQUidity and ReseRve management GOVERNING LAW LaWs oF QataR DISTRIbUTION aUction SOURCE: cbQ maRch 2013 name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . organisation . . . . . . . . . . . . . . . . . . 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Please send to: subscriptions and marketing mushtak Parker associates Ltd. 30 chelmsford square, London nW10 3aR england, UK tel: +44 (020) 8459 4310 e-mail: mushtakparker@yahoo.co.uk Egypt Shoura Adopts Sukuk Law after a lengthy three-day debate, egypt’s shoura council (Upper house) finally passed a 33-article Law Regulating the issuance of sukuk in march 2013. the law allows the state and its related entities to issue domestic and international shariah-compliant securities, which are also exempt from tax on capital gains and coupon payments. egyptian officials maintain that it will take some three months for the final regulations to be in place, after which the first sovereign sukuk, probably in the region of Us$1bn, is expected to be issued in the second half of this year. one of the first tasks of new egyptian Finance minister al-mursi al-sayed hegazy has been to negotiate a Us$4.8bn conventional standby Financing Facility from the international monetary Fund (imF). but because of the uncertainty in the country, the facility has been delayed. cairo has turned to the islamic development bank (idb) for financing, but its allocation in some respects is tied to its subscription to the idb equity. the idb has released over Us$200m of emergency financing to egypt to fund projects that will generate employment especially for the youth. PAyMENT £ cheque drawn on a UK bank & payable to mushtak Parker associates Ltd £ Please invoice me/my company (pro forma) b A N K I N G I N b R I E F £ Please send me details of payment by bank transfer Signature ....................................................................................................... Islamic banker, published monthly by mushtak Parker associates (mPa) Ltd, is available on annual subscription for UK£450 for a single subscriber and user or UK£600 for a single subscriber but with multiple users within the same organisation or household. *Payment in Sterling Only subscriptions will automatically be renewed unless otherwise cancelled by letter or e-mail Islamic banker march 2013 Rabi al-thani - Jumada awwal 1434 206 5
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