Move will pave the way for more Gulf firms to tap into Malaysia's market
Riyadh-based Al Bayan Holding became the first Saudi Arabian company to issue an Islamic bond in Malaysian ringgit, paving the way for more corporations from the kingdom to tap into Malaysia's market, the world's biggest for sukuk.
Al Bayan issued 200 million ringgit ($65.4 million) as the first tranche of a newly established 1 billion ringgit programme, a statement from Guidance Financial Group, the company's advisers, said on Wednesday. Pricing details were not immediately available.
Both the creation of the programme, rated AA3 by local agency RAM Ratings, and the issue of a Malaysian currency sukuk are firsts by a Saudi company.
Companies in the Gulf Arab region have beeen looking at issuing Islamic bonds that target Malaysian investors as a way to diversify funding sources and tap Asian demand for Middle East debt.
Al Bayan issued the sukuk as a wakala; certificates are issued by an originator through a special-purpose vehicle that buys assets which are given to an agent for management.
HSBC Holdings' Islamic unit in Malaysia, Hong Leong Islamic Bank, and Kenanga Investment Bank Bhd acted as joint lead managers on the deal, while Abu Dhabi's Al Hilal Bank was manager in the United Arab Emirates.
Al Bayan has interests in businesses including construction of infrastructure and buildings, general contracting, information technology products and services, and advertising and publishing.