BMA Islamic bond oversubscribed
The Bahrain Monetary Agency (BMA)’s $100 million Islamic leasing bond (sukuk), launched earlier this month, has been oversubscribed. At the recent closing of subscriptions, BMA had received tenders worth $112.8 million for the issue of Ijara sukuk, which carries a maturity of five years.
Due to the over subscription, the sukuk will be allocated on pro-rata basis. The bonds will be listed and traded on the Bahrain Stock Exchange. They can also be traded at prevailing market prices, over-the-counter through the participating banks.
The issue date is April 2, 2003 and the maturity date is April 2, 2008. The rental return on the sukuk is 3.75 percent, up from the previously announced 3.25 percent. The return is to be paid twice a year on October 2 and April 2 each year.
With this, six issues of Ijara sukuk, worth a total of $480 million, have been made by the BMA. The issue carries a rating of A- from international rating agency, Standard & Poor's (S&P).
Ijara Sukuk are ideal Islamic financial structures because they are asset-backed securities and therefore can be listed on a stock exchange and be traded. Islamic bonds do not pay interest, which is banned by Muslim law, but they mimic such payments by discounting the bond’s selling price or through profit sharing. — (menareport.com)
© 2003 Mena Report (www.menareport.com)