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Sunday, 2 March 2014

Malaysia: AmIslamic bank issues RM200m Tier 2 Sukuk Murabahah

KUALA LUMPUR, Feb 28 — AmIslamic Bank Bhd, the Islamic banking arm of AMMB Holdings Bhd, successfully issued its inaugural issuance of RM200 million Basel III-compliant Tier 2 Subordinated Sukuk Murabahah (Tier 2 Sukuk Murabahah) today. 

In a statement today, AMMB said the sukuk is the world's first Basel III-compliant Tier 2 Subordinated Sukuk to be issued under the Shariah principle of Murabahah based on commodity trading (via a Tawarruq arrangement).
“The RM200 million Tier 2 Sukuk Murabahah, with a maturity of 10 years and callable at the end of year five, carries a semi-annual profit payment of 5.07 per cent per annum,” it said.
AmInvestment Bank Bhd acted as the sole Principal Adviser, Lead Arranger and Lead Manager for this Tier 2 Sukuk Murabahah (2014/2044) issuance which was made under the RM3 billion Subordinated Sukuk Murabahah Programme, it said.
AmBank Group Managing Director Ashok Ramamurthy said the successful closing of this landmark transaction represents a significant milestone for the Malaysian Sukuk market.
“At the same time, this issuance saw the engineering of a Shariah mechanism that is acceptable to both the regulators and the Shariah scholars.
“This is the first Basel III-compliant Tier 2 Sukuk issuance by a Malaysian issuer which demonstrates our capability in Sukuk structuring and profound track record in product innovation,” he added.
AmIslamic Bank was upgraded to AA2 by RAM Rating Services Bhd in November 2013 along with AmBank (M) Bhd and AmInvestment Bank.
The Tier 2 Sukuk Murabahah has been assigned an AA3 rating by RAM Ratings, one notch below AmIslamic Bank’s long-term financial institution rating, which reflects their lower ranking in the priority of claims upon bankruptcy or liquidation, relative to senior unsecured creditors.
(The Malay Mail Online.Com / 28 Feb 2014)
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