Bandar Seri Begawan – Bank Islam Brunei – Darussalam’s (BIBD) appointment as one of the co-lead managers for the Islamic Development Bank’s (IDB) upcoming US$1.5 billion sukuk issue gives a nod to Brunei’s leadership role in Islamic finance and the application of syariah-compliant instruments.
The bank was mandated alongside BNP Paribas, CIMB, Deutsche Bank and HSBC last July for the IDB’s latest sukuk offering, which will have a three-to five-year maturity date to be decided and a price to be announced, depending on the investor base.
“Choosing a banking institution from Brunei as part of the lead managers, for us, it is partly out of respect for Brunei. It has done extensive work in terms of regulatory framework, which has led to the establishment of several
Islamic banking institutions in the country,” IDB vice-president Abdul Aziz Al Hinai said following a meeting with investors at the Empire Hotel and Country Club yesterday.
“Brunei is an active member of the IDB, and is also very proactive in terms of providing the institutional set-up for syariah-compliant products and I’m sure it will benefit in the long run from this lead.”
The sukuk transaction will be launched by either September 9 or 10, Abdul Aziz said, and it’s pricing and maturity date revealed when the roadshow ends. Having already covered Riyadh, Kuala Lumpur and Singapore, the IDB will be continuing on its investor roadshow to the UAE on September 6, followed by Switzerland before ending it in London on September 8.
The total amount to be raised during the drive will depend on the desire of investors and the condition of the sukuk market,” he said.
The Jeddah-based institution is issuing the latest sukuk as the first tranche under a US$6 billion sukuk and medium-term note programme partly aimed at helping member countries mitigate the impact of the global financial downturn and the rise in commodity prices.
At least 25 of the 56 IDB member states are classified as least-developed countries (LDCs), which include some of the world’s poorest countries.
Javed Ahmad, the acting managing director of BIBD, said its appointment as joint lead manager is going to be “a tremendous benefit and a catalyst” for the bank to be involved in other transactions domestically and internationally, adding that there are already a number of transactions that the bank is already in discussions for. He did not give further details.
This is the first time that Brunei gets the privilege and opportunity to be involved in an international sukuk issue, and a sukuk issue that is actually very important from our perspective,” he said.
BIBD was the lead manager and underwriter of the first corporate sukuk issued in the Sultanate in 2006. The Brunei government has so far issued $1.8 billion worth of sovereign sukuks.–
source : Bt