Wednesday February 27, 2013
Exim Bank plans US$1b sukuk
KUALA LUMPUR: Export-Import Bank of Malaysia Bhd (Exim Bank) plans to sell Islamic bonds in the global market, the second by an Asian company in 2013 after a two-year absence.
The state-owned trade finance provider invited proposals from banks to arrange US$1bil (RM3.1bil) of dollar-denominated debt for a possible second-quarter offering, said three people familiar with the deal.
The lender aimed to increase the proportion of syariah loans to 30% of the total in two years from 20% now, chief executive officer Adissadikin Ali said in an interview yesterday, declining to comment on the potential issuance.
Exim Bank will become only the fourth Asian corporate to ever tap dollar sukuk investors after Sime Darby Bhd, the world’s biggest palm-oil producer, sold US$800mil (RM2.48bil) of notes in January. The government’s US currency Islamic bonds maturing in 2021 yield 2.92%, compared with 3.55% for a similar ringgit debt.
“More Asian companies will tap the dollar sukuk market given the pace of regional growth and overseas expansion,” Mohamed Azahari Kamil, the Kuala Lumpur-based chief executive officer of Asian Finance Bank Bhd, the Malaysian unit of Qatar Islamic Bank SAQ, said in an interview yesterday.
“Islamic borrowing costs for well-rated corporates are cheap.”
A sale would be the Kuala Lumpur-based institution’s second foray into the international debt arena. It sold US$500mil (RM1.55bil) of five-year notes in May at a coupon rate of 2.875%. Those securities are rated A3 by Moody’s Investors Service and A- by Fitch Ratings, the fourth-lowest investment grades and the same ranking as the sovereign.
The 2.875% bonds due in 2017 yielded 1.91% yesterday, down 11 basis points, or 0.11 percentage point, from the end of last year, data compiled by Bloomberg show.
The Bloomberg Malaysian Sukuk Ex-MYR Index of foreign-currency Islamic debt rose 0.1% last week to 111.682 and is little changed in 2013. – Bloomberg