Al Baraka to raise $200m with sukuk
Manama, May 16, 2013
Al Baraka Islamic Bank yesterday announced that it was raising $200 million through trust certificates in a Sukuk Al Wakala issue which will mature in 2015.
The 18-month sukuk is aimed at raising cash to help increase the bank's exposure to Sharia-compliant trade finance which accounted for some $5 billion of business for the bank last year, reported the Gulf Daily News, our sister publication.
The issue is being promoted through a private placement with participants able to invest a minimum of $100,000.
The purchase price for the certificates is 100 per cent of their face amount, plus an amount equal to 2 per cent of the face amount of the certificates for an agency.
"The proceeds from the certificates will be used to invest, through the use of a wakala structure, in a Sharia-compliant trade finance arrangement or arrangements," a spokesman for the bank said.
"Given the nature of the investments that will be made with the proceeds from the certificates, they will not be listed or admitted to trading on any stock exchanges or markets," he added.
The bank expects a profit return on the certificates of 6 per cent over the 18- month period. – TradeArabia News Service