Friday, September 30, 2011

AmIslamic Bank issues RM600m Islamic debt notes

KUALA LUMPUR: AMMB HOLDINGS BHD []'s unit AmIslamic Bank has issued the first tranche of subordinated sukuk, amounting to RM600.0 million under the RM2.0 billion nominal value subordinated sukuk musharakah programme.

The banking group said on Friday, Sept 30, the proceeds would be used for AmIslamic Bank's general working capital, including refinancing its existing RM400 million subordinated sukuk musharakah, funding the growth of its Islamic financial services business.

AMMB said the sukuk were structured in accordance with the risk-weighted capital adequacy framework and capital adequacy framework for Islamic banks issued by Bank Negara Malaysia and qualified as tier two capital of AmIslamic Bank.

Under the programme approved by BNM and the Securities Commission, the bank could issue the sukuk based on the funding requirements of AmIslamic Bank. AMMB said each tranche of the sukuk to be issued shall have a tenor of not less than five years and not more than 15 years from the issue date.

AmIslamic Bank has the option to redeem the sukuk at par with effect from the fifth year, and on any profit payment date thereafter, preceding the maturity date of the sukuk.RAM Rating Services Berhad has assigned a long-term rating of A1 to the sukuk.

Upon the issuance of the first tranche of RM600.0 million of the sukuk, AmIslamic Bank's proforma overall risk weighted capital ratio was expected to be 13.9% (12.5% as at June 30, 2011).

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