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IILM Issues US$500mn Sukuk in Two Tranches

Kuala LumpurThe International Islamic Liquidity Management Corporation (IILM) successfully issued on 10 April 2019 a total amount of US$500 million short-term Sukuk in two tranches.

The Sukuk were rated A-1 by Standard & Poor’s Rating Services and were issued at different sizes, tenors and profit rates comprising:

  1. A US$200 million tranche with a 1-month tenor at a profit rate of 2.67 per cent; and
  2. A US$300 million tranche with a 3-month tenor at a profit rate of 2.76 per cent.

According to the IILM, the corporation envisages that it will continue to issue its short-term Sukuk in various tranches whenever market conditions permit.

The issuance was “well supported with demand across the two series of the IILM Sukuk with a bid to cover ratio of 214 per cent and 329 per cent for the 1-month and 3-month tenors respectively.”

Purchases by Islamic Primary Dealers (PDs) in the primary auction amounted to 63 per cent and 74 per cent for the 1-month and 3-month Sukuk respectively.

In terms of geographical distribution, the allocation of GCC-based PDs stood at 55 per cent and 53 per cent for the 1-month and 3-month Sukuk respectively, whereas Asia-based PDs were allocated 17 per cent and 34 per cent respectively. The PDs based in other jurisdictions received 28 per cent and 13 per cent for the 1-month and 3-month Sukuk, respectively.

According to the IILM, the primary dealers that participated in the two auctions conducted under the competitive bidding of the Bloomberg AUPD Platform included Abu Dhabi Islamic Bank; Al Baraka Turk Participation Bank; Barwa Bank; Boubyan Bank; CIMB Islamic Bank Berhad; First Abu Dhabi Bank; Kuwait Finance House; Macquarie Bank; Maybank Islamic Berhad; Qatar Islamic Bank; and Standard Chartered Bank. 

MDV Raises RM270m through Sukuk Issuance to Fund Ongoing Mandate from Malaysian Government to Support Information & Communications and Green Technology Ventures through Innovative Islamic Finance

Kuala LumpurMalaysia Debt Ventures Berhad (MDV) has raised RM270 million via an Islamic Medium-Term Notes (iMTN) issuance under its existing RM1 billion Sukuk Murabaha Programme (The Third Fund). Launched in 2017, The Third Fund furthers MDV’s ongoing mandate from the Government of Malaysia to support the development of the nation’s information and communications technology, green technology and emerging technology sectors via innovative financing.

The Third Fund, which is fully guaranteed by the Government of Malaysia and which has a total drawdown of RM500 million to-date, according to MDV, also aims to increase awareness of the socio-economic benefits of Islamic financing while at the same time expanding MDV customers’ financing options to meet their growth requirements.  

Brunei Raises US$74m Through Domestic Sukuk Ijarah Issuance

 BruneiThe Autoriti Monetari Brunei Darussalam (AMBD) issued a BND100 million (US$74.05 million) Sukuk Ijarah on 11 April 2019. The certificates have a tenor of 91 days and were priced at a rental rate of 1.625 per cent. Brunei has to date raised BND12.73 billion (US$9.43 billion) in short-term sovereign domestic Sukuk, of which BND322 million (US$238.44 million) were outstanding at 11 April 2019.

 Government of Indonesia Raises IDR19.8 trillion (US$1.4bn) through Four Rupiah-denominated Sukuk Auctions as Total Funds raised Through Sukuk Between January and April 2019 reaches US$5.59bn

JakartaThe Government of Indonesia continues to consolidate its role as one of the most proactive repeat issuers of sovereign domestic Sukuk in the market with four separate issuances in April 2019 raising IDR19.801594 trillion (US$1.4 billion) in the process.

The Department of Islamic Financing at the Directorate General of Budget Financing and Risk Management, Ministry of Finance of Indonesia, is a prolific issuer of Sukuk on behalf of the Government of Indonesia. In the period January to April 2019, the Indonesian Ministry of Finance has raised IDR48.697 trillion in rupiah-denominated Sukuk and US$2.1 billion is US dollar denominated Sukuk. This is equivalent to a total US$5.59 billion in Sukuk issuances for the period.

The Directorate General of Budget Financing and Risk Management also conducted three auctions through the Bank of Indonesia Auction System for Sovereign Sharia Securities on 2, 16 and 30 April 2019 raising IDR19.16 trillion comprising six tranches each of varying maturities and profit rates. The Directorate General of Budget Financing and Risk Management also sold tradable Sukuk Negara Certificates totalling IDR641.594 billion through private placement. All the issuances saw strong over-subscriptions with bids totalling IDR50.84 trillion indicating robust demand from local institutional investors. 

ITFC Pens US$1.1bn of Trade Financing Agreements to Boost Intra-OIC Trade

MarrakeshThe International Islamic Trade Finance Corporation (ITFC), the trade fund of the Islamic Development Bank (IsDB) Group, has signed six major Trade Financing and Development Agreements worth in excess of US$1.1 Billion with Organisation of Islamic Cooperation (OIC) member countries including the Commonwealth of Independent States (CIS), MENA, South America and Sub-Saharan Africa regions.

The agreements were signed at the 44th Annual Meeting of the IsDB Board of Governors, which was held in Marrakesh, Morocco in early April 2019. 

In a statement, ITFC stressed that the framework agreements, which provide state and private sector financing as well as capacity building programmes for export and SME development initiatives, target high growth industries including agricultural commodities, energy commodities such as crude oil, agricultural inputs, medical supplies, construction materials, metals and livestock.

“The signing of these framework agreements represent major strategic steps in ITFC’s efforts to develop sustainable value chains and enhance trade between OIC countries and across the South-South corridor. They have been formed through careful alignment with national development strategies in member countries to support economic diversification and job creation policies,” added Eng. Hani Salem Sonbol, CEO of ITFC.

The agreements signed include:

  1. a US$500 million agreement with The African Export-Import Bank under which ITFC is to finance the Arab-Africa-Trade Finance and Promotion Programme (AATFPP) to boost trade cooperation, expansion and investment between African and Arab Member Countries. Key features of the AATFPP will include financing facilities, integrated trade solutions to support SMEs, joint capacity building programmes, market access support and trade facilitation technical cooperation.
  2. A Three Year Agreement with Mali totaling US$300 million under which ITFC will mobilize financing from international and regional banks and financial institutions to be channelled towards imports of energy products such as crude oil and refined petroleum products, exports of agricultural commodities, and imports of agricultural inputs and foodstuff.
  • An MoU with the Moroccan Investment and Export Development Agency for an undisclosed amount to strengthen trade between Morocco and other African countries.
  1. A US$80 million agreement with Niger to finance SMEs and to boost trade links in especially agricultural commodities and livestock exports to other OIC member countries. This will be done through extending lines of financing to local banks to fund the exports.
  2. A 3-year agreement with the Kyrgyz Republic worth US$150 million to boost trade links between the Republic and other OIC member countries. This would be done through extending lines of credit to local banks to support the private sector, in addition to the provision of financing to the Kyrgyz government to fund the acquisition of strategic commodities.
  3. A 3-year Three Agreement with Suriname totaling US$75 million to finance local SMEs and exports, and a Murabaha facility to finance import of essential goods.

Since 2008, ITFC is the leading provider of trade solutions for OIC member countries, providing more than US$45 billion of trade financing in the period.

Jordan Islamic Signs JD334 million Murabaha Financing Agreement with NEPCO

AmmanJordan Islamic Bank signed a JD334 million (US$471.09 million) Murabaha financing agreement with the local electricity utility National Electric Power Company (NEPCO) on 15 April 2019. The proceeds will be used to finance expansion and balance sheet requirements of NEPCO.

SAIB Issues SR215m Subordinated Tier I Sukuk as it Seeks to Diversity Sources of Funding

JeddahThe Saudi Investment Bank (SAIB) successfully closed the issuance of a SR215 million Subordinated Tier I Sukuk on 15 April 2019 through a private placement offer in Saudi Arabia. In a statement to Tadawul, SAIB said that the Sukuk will enhance the bank’s capital base and capital adequacy ratios. In addition, the Sukuk further diversifies the bank’s funding sources and extends its maturity profile. The Sukuk are perpetual securities with no fixed redemption date. However, the bank has the right to call the Sukuk on predefined dates. Alistithmar for Financial Securities and Brokerage Company acted as the sole lead manager for this issuance.

Mouwasat Medical Signs SR170 million Murabaha Agreement with Project Support Fund

Al Khobar Mouwasat Medical Services, which operates several hospitals in key metropolitan cities in Saudi Arabia, signed a SR169.85 million (US$45.29 million) Murabaha financing agreement with the Project Support Fund, which is affiliated to the Saudi Ministry of Finance. The proceeds of the facility, said Mouwasat in a filing with Tadawul (the Saudi Stock Exchange), will be used as working capital for the Mouwasat Hospital in Al Khobar. The 10-year finance facility has a two-year grace period.

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