The Government of Pakistan had planned to issue Sukuk worth USD 750 million to USD 1 billion, but this has been delayed consequent to the Cabinet rejecting the F-9 Park in Islamabad as an asset-backed guarantee. According to industry sources, the Ministry of Finance is in the process of identifying other assets that can be put forward for this. Once finalised, the Dollar-denominated Sukuk are likely to draw significant interest from international investors on the back of the improving macroeconomic situation and the resumption of the International Monetary Fund (IMF)&r...

The AA1/Stable rating of Encorp Systembilt (Encorp)’s MYR 1.575 billion Sukuk Murabahah has been reaffirmed by RAM Ratings (RAM). Encorp is the concessionaire for the development of 10,000 units of teachers’ quarters across Malaysia, and it, therefore, receives monthly concession payments from the Government of Malaysia. These payments are not subject to performance-related deductions, as it is not required to carry out any maintenance of the facilities. Rating Rationale   This reaffirmation reflects forecasts that the Sukuk’s...

The NBB Group, which includes National Bank of Bahrain and Bahrain Islamic Bank, has finalised an Islamic financing facility valued at USD 235 million, for Oman-based Mazoon Electricity Company (MZEC). NBB Group serves as the sole structurer, arranger and bookrunner on the facility.  Why it Matters? Hisham AlKurdi, NBB Group CEO (Corporate and Institutional Investment Banking) commented on the strategic importance of the debut facility organised for MZEC, stating that Oman is one of NBB Group&rsq...

Dubai-based real estate fund operator Emirates REIT’s plans to issue a new debt offering have been met with significant resistance from the majority of its existing bondholders, according to a media report. Emirates REIT issued USD 400 million Sukuk Murabahah in December 2017 at a profit rate of 5.125% with a maturity of five years (2022), and the plan is for the new instrument to mature in 2024. This plan, announced on the 18th of May 2021, is what has given rise to these recent concerns.  Why it Matters?  The said bondhold...

The Sovereign Fund of Egypt (TSFE) and Egypt-based EFG Hermes Holding (EFG Hermes) have signed agreements to acquire 76% of Egypt’s Arab Investment Bank (AIB). Although approved by the Egyptian cabinet on the 19th of May 2021, the transaction is pending final approval from the Central Bank of Egypt and is subject to a number of conditions. The acquisition will be settled via a capital increase that will boost AIB’s paid-in capital up to EGP 5 billion (USD 320 million). AIB’s majority shareholder at present,...

The Egyptian Islamic Finance Association (EIFA) recently released its quarterly report on Islamic banking. According to the report, as at end-March 2021, the volume of Shariah-compliant banking in Egypt had reached around EGP 378 billion, up 14.3% year-on-year and accounting for a volume share of approximately 5.3% of Egypt’s total banking market.  Why it Matters?  There has been significant development of many Islamic banking products catering to the varied needs of customers, although the market still has room fo...

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RAM Ratings (RAM) has reaffirmed the AA2/Stable rating of Tanjung Bin Power’s (TBP) MYR 4.5 billion Sukuk Ijarah Programme (the Sukuk). TBP is a Malaysia-based independent power producer (IPP) that owns and operates a 2,100 MW coal-fired power plant in Tanjung Bin, Johor, under a 25-year Power Purchase Agreement (PPA) with sole off-taker Tenaga Nasional Berhad (TNB), which expires in September 2031.  Ratings Rationale The rating is supported by TBP’s healthy operating performance, resulting in satisfactory debt-coverag...

Djibouti’s Islamic lender Salaam African Bank (SAB) has acquired 100% shareholding of Kenya’s Uwezo Microfinance Bank (Uwezo MFB) effective 25th of March 2021, according to a recent statement issued by the Central Bank of Kenya (CBK).  Why it Matters?  The acquisition, which was made at an undisclosed fee, will enable SAB to make inroads into the East African banking market. SAB is one of three Islamic banks in Djibouti, and holds 30% of total bank accounts in the country. The acquisition is slated to strengthen the business model of...