First Gulf to set up $1bn sukuk in Malaysia
Kuala Lumpur, March 6, 2014
Abu Dhabi's First Gulf Bank, the third-largest bank by assets in the UAE, will raise 3.5 billion ringgit ($1.07 billion) with Islamic bonds in Malaysia, according to a statement on Thursday by credit rating agency RAM Ratings.
The Islamic bond, or sukuk, program will be issued by the bank's funding unit, FGB Sukuk Company II Ltd. RAM rated the program 'AAA' or stable on the bank's size and high likelihood of government support, as the Abu Dhabi ruling family owns 64 percent of the firm.
First Gulf Bank follows numerous institutions to find funding in Malaysia's sukuk market, the world's largest. More than two-thirds of global sukuk issuance in the first half of 2013 took place in Malaysia, followed by Saudi Arabia and the UAE.
"The ratings also incorporate the bank's excellent profitability, robust capitalization, expanding franchise and moderate asset quality," said RAM.
Funds from the program will go toward expanding the bank's day-to-day business. RAM did not indicate when the first issuance will take place. - Reuters