Kuwait-based Boubyan Bank has issued USD 500 million worth of perpetual Tier 1 Sukuk, which are non-callable for six years, with an annual profit rate of 3.95%. The Sukuk offering, which closed on the 24th of March 2021, attracted a total orderbook in excess of USD 1.3 billion, representing a 2.6x over-subscription rate.  Why it Matters?  According to Abdul Salam Al-Saleh, Chief Executive Officer of Corporate Banking Services of Boubyan Bank, the strong demand from investors highlights the bank’s regional and inter...

Bahrain-based Islamic investment bank GFH Financial Group (GFH) has signed an agreement with Bahrain Bourse (BHB) and the Central Bank of Bahrain (CBB) on the 24th of March 2021 to gain access to Murabahah services. Launched by BHB in May 2020, the online platform offers services through the use of Shariah-compliant Ijara Sukuk as the underlying asset for Murabahah transactions.  Why it Matters?  These Shariah-compliant solutions and trading opportunities will aid the continued growth of GFH’s treasury and capital...

Malaysian Rating Corporation (MARC) has downgraded MEX II’s MYR 1.3 billion Sukuk Murabahah Programme (Sukuk) rating to C-IS from BB-IS, and its MYR 150 million Junior Bonds to C from B, while maintaining the ratings on MARCWatch Negative.   Rating Downgrade Rationale MARC’s downgrade on the ratings is driven by liquidity pressure that the company is facing and the likelihood that MEX II will miss an upcoming Sukuk repayment of MYR 68.7 million which is due on the 29th of April 2021. Furthermore, MEX II has t...

Despite COVID-19 and the many challenges it brought, Malaysia’s Islamic banking sector posted a growth of 8.1% in financing in 2020. This stands tall in comparison to a mere 1% in growth that conventional banks saw in 2020. Given this, RAM Rating Services (RAM) has maintained its Stable outlook on the Islamic banking sector in Malaysia.  Why it Matters?  RAM stated that the credit growth of the overall banking system in Malaysia was continually advanced by Islamic financing, mainly on the back of the “Islamic First” agenda that several m...

The UK Government has issued GBP 500 million worth of Shariah-compliant sovereign bonds with a five-year maturity in the country’s second sovereign Sukuk issuance, according to a statement released by the HM Treasury on the 25th of March 2021. The Sukuk has received strong demand from investors based in the UK and from major hubs for Islamic finance in the Middle East and Asia.  Why it Matters?  This marks UK’s second sovereign Sukuk issuance, which was more than twice the size of the country’s first sovereign Sukuk issuance of ...

A report by Moody’s Investors Service (Moody’s) has said that the growth of Islamic finance alongside rising demand for highly rated Sukuk will place Shariah-compliant multilateral development banks (MDBs) favourably. MDBs are also positioned well to benefit from the rising focus on environmental, social and governance (ESG) themes, in addition to sustainable investing, as Islamic principles forbid investment in certain areas such as alcohol, gambling and tobacco.  Why it Matters?  Continuing growth in global Islamic banking will con...

The Islamic Development Bank (IsDB) has issued USD 2.5 billion in Sustainability Sukuk with a five-year maturity, under its USD 25 billion Trust Certificate Issuance Programme, according to an official IsDB statement released on the 25th of March 2021.  Why it Matters?  The Sustainability Sukuk marks IsDB’s largest public issuance to date and is its inaugural issuance in 2021. Proceeds of the Sustainability Sukuk will be used to finance and refinance green projects (10%), with the remaining proceeds used towards social development pro...

On the 24th of March, 2021, the Arabian Centres Company (ACC), an operator of 21 shopping centres in Saudi Arabia, announced its planned sale of USD-denominated Sukuk. In its Tadawul filing, ACC elaborated that the size of this issuance is to be determined depending on market conditions, its own financial health, the funding requirement and on strategy. The proceeds of the debt sale are to be used for general corporate purposes and to meet the company’s financial and strategic goals Why it Matters?  The Kingdom’s lifestyle and entertainme...

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