August 28, 2014 / 12:50 PM / in 3 years

Dogus Group approved to issue Turkey's first corporate sukuk

Aug 28 (Reuters) - Turkish conglomerate Dogus Group has received regulatory approval to raise $370 million by issuing the country’s first corporate sukuk, the Capital Markets Board said.

Dogus, which has interests ranging from finance to media, will issue the Islamic bonds through its asset leasing company, Dogus Varlik Kiralama; it gave no time frame for the deal.

So far the only Turkish issuers of sukuk have been the government and the country’s four Islamic banks, known as participation banks. Last year, Turk Telekomunikasyon said it was considering a sukuk issue, but opted for a $1 billion conventional bond instead.

For years Islamic finance developed slowly in Turkey, partly because of political sensitivities and a staunchly secular legal system. The momentum shifted after Turkey issued its first sovereign sukuk in 2012, raising $1.5 billion.

Turkey is seeking to build a bigger role in the industry and forge closer ties with fast-growing economies in the Gulf and southeast Asia, the traditional centres of Islamic finance.

The Turkish government is encouraging three state-run banks - Ziraat, Vakifbank and Halkbank - to set up their own Islamic banking operations. (Editing by Andrew Torchia)

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