KUALA LUMPUR Aug 25 CIMB Islamic, the sharia compliant unit of Malaysia's second largest bank, is preparing an Islamic bond programme to raise up to 5 billion Malaysian ringgit ($1.58 billion), according to ratings agency MARC.
The Basel III compliant sukuk programme, assigned a preliminary rating of AA+ by MARC, will go towards replacing an existing 2 billion ringgit Tier-2 sukuk and to fund working capital, the agency said on Monday.
The securities commission is still finalising approval and CIMB is not expected to issue sukuk from the programme any time soon, an official with MARC said. The company did not specify the range of maturities or sizes for sukuk under the programme.
CIMB is currently in talks with two smaller banks to create a mega-Islamic bank. The deal would make CIMB the country's biggest bank by assets, ahead of Malayan Banking Bhd (Maybank) .
Maybank last week said it won regulatory approval to raise 10 billion ringgit by issuing capital securities, with funds going towards working capital, general corporate purposes and the refinancing of existing debt. (1 US dollar = 3.1610 Malaysian ringgit) (Reporting By Al-Zaquan Amer Hamzah; Editing by Michael Urquhart)