CIMB Islamic to raise RM5 billion with Basel III, Tier 2 sukuk programme
CIMB Islamic, the shariah-compliant unit of Malaysia's second largest bank, is preparing an Islamic bond programme to raise up to RM5 billion ($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 RM2 billion 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 RM10 billion by issuing capital securities, with funds going towards working capital, general corporate purposes and the refinancing of existing debt. – Reuters, August 26, 2014.