KUALA LUMPUR Feb 16 Kuwait-based Gulf
Investment Corporation (GIC) has launched a 500 million ringgit
($164 million) sukuk issue in Malaysia as part of an existing
funding programme, one of a growing number of Middle East
issuers to seek alternative sources of funding.
GIC, which was set up to drive private enterprise and
economic growth in the Gulf region, had earlier established a
3.5 billion ringgit sukuk programme in the Southeast Asian
GIC launched the five-year, 500 million ringgit portion on
Wednesday, a source with direct knowledge of the deal said.
GIC was not immediately available for comment.
RBS is the deal's sole principal adviser and arranger. RBS
and Maybank Investment Bank are the joint lead managers.
The fund-raising programme was rated AAA, the highest
rating, by Malaysia's RAM Ratings.
The Islamic bonds are structured according to the wakala bi
istithmar concept where GIC will be appointed as agent to
collect and manage the sukuk proceeds for the bondholders.
GIC then appoints itself to manage the sukuk assets and will
invest the net proceeds through a commodity murabaha financing
arrangement and a sub-wakala investment facility. Proceeds will
be channelled into sharia-compliant ventures.
GIC's investments include companies such as The National
Titanium Dioxide Co, Gulf Industrial Investment, Gulf Re
Holdings Ltd, Al Dur Power & Water Co and National
Industrialisation Co .
It was established in 1983 by the Gulf Cooperation Council
and is owned by the six member states of Bahrain, Kuwait, Oman,
Qatar, Saudi Arabia and United Arab Emirates.
GIC had previously issued 1 billion ringgit of bonds in
Malaysia in 2008.
Apart from GIC, Dubai is working on plans to issue about
$1.5 billion in sovereign sukuk in Malaysia while National Bank
of Abu Dhabi , the UAE's largest lender by market
value, recently launched 500 million ringgit in 10-year sukuk.
Issuers seeking sharia-compliant funding can tap into an
estimated $79 billion in excess liquidity in Malaysia, which is
also home to the world's largest Islamic bond market.
Issuers in Malaysia accounted for about 60 percent of total
global Islamic bond sales of $14.3 billion in 2010, according to
estimates by Thomson Reuters.
(Click on for more Islamic finance stories and
for a speed guide)
($1 = 3.053 Malaysian Ringgit)
(Additional reporting by Shaheen Pasha in Dubai)
(Reporting by Liau Y-Sing; Editing by Kim Coghill)