May 29 2011

10-year Sukuk for Malaysia

Global Sukuk leader Malaysia normally issues domestic currency issues aimed at the local market but when it wants to get serious and tackle the global market it issues in US dollars.

In spite of the battering that the greenback has been having of late, Malaysia is now said to be planning a 10-year Sukuk denominated in the beleaguered currency. The last time Malaysia issued a dollar denominated sovereign Sukuk was in June 2010 when its $1.25bn Ijarah issue carried a 5-year tenor. Arrangers on the last issue were HSBC Amanah , CIMB Islamic and Barclays Capital. It is likely that at least two of these three will be involved in the new issue.

Prior to the 2010 issue Malaysia had only tapped the international Islamic debt capital market on two occasions before: once in 2002 and once in 2001. The 2002 issue was also a 5-year Ijarah Sukuk and was for $600m. HSBC Amanah was the lead arranger for this issue too.

While Malaysia has dominated Sukuk league tables since the start of the global financial crisis its output of Sukuk has been almost exclusively ringgit denominated and its audience almost entirely domestic. Size and pricing of this new issue will provide many insights into Malaysia Inc's worldview of the health of the global Sukuk market.

© The Islamic Globe 2011

© Copyright Zawya. All Rights Reserved.

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