KUALA LUMPUR (Oct 21): Bank Islam Malaysia Bhd today issued its third tranche of RM700 million subordinated sukuk murabahah under its RM10 billion Sukuk Murabahah Programme today.

“The sukuk shall qualify as Tier 2 regulatory capital of Bank Islam in compliance with Bank Negara Malaysia’s Capital Adequacy Framework for Islamic Banks (Capital Components). Hence, it will enhance the capital adequacy of Bank Islam in line with the Basel III requirements,” the bank said in a statement.

The sukuk, redeemable at their full nominal value upon maturity, comes with a call option on its fifth anniversary and is rated A1/stable by RAM Rating Services Bhd, said Bank Islam.

The bank said it lodged the Sukuk Murabahah Programme with the Securities Commission Malaysia in September 2018, and has the flexibility of issuing subordinated sukuk and senior sukuk.

It added that RAM Ratings has reaffirmed a final long-term rating of ‘A1/stable’ and ‘AA3/stable’ to the subordinated sukuk and senior sukuk respectively under the programme.

Bank Islam is also the principal adviser, lead arranger, lead manager and shariah adviser for the programme, which is the second established by the bank.  

The programme's first tranche was issued in November 2018 amounting to RM300 million, followed by the second tranche in March this year with an amount of RM400 million.

“Historically, Bank Islam established our first sukuk programme in the form of Subordinated Sukuk Murabahah Programme of RM1 billion in three tranches in October 2014,” Bank Islam CEO Mohd Muazzam Mohammed said in the statement.

“The bank issued the first tranche of RM300 million in April 2015, the second tranche of RM400 million in December 2015 and the third tranche of the programme amounting to RM300 million in November 2017,” he added.