Sichuan Devel­op­ment hires banks for $300mn sukuk

Kuwait Times - - BUSINESS -

SHANG­HAI:

The in­vest­ment arm of the Sichuan pro­vin­cial gov­ern­ment has hired four banks to help raise $300 mil­lion via Is­lamic bonds, the first such deal from a Chi­nese sta­te­owned com­pany, ac­cord­ing to the firm ad­vis­ing on the deal.

The five-year sukuk will be raised through the leas­ing arm of Sichuan Devel­op­ment Hold­ing Co (SDH) and is ex­pected to be com­pleted in the next two months, said Bobby Tay, an ad­vi­sor for Sin­ga­pore-based Silk Routes Fi­nan­cials. SDH is the largest public-sec­tor en­tity in terms of to­tal as­sets in Sichuan Prov­ince, with con­sol­i­dated as­sets of around 600 bil­lion yuan ($88.7 bil­lion). In Septem­ber, SDH was given an A- rating by Fitch Rat­ings with a sta­ble out­look.

CIMB, Stan­dard Char­tered, Bank of China and Bank of China In­ter­na­tional have been hired to ar­range the trans­ac­tion, with pro­ceeds to be used for the ac­qui­si­tion of sharia com­pli­ant as­sets in main­land China. The sukuk will be is­sued via a spe­cial pur­pose ve­hi­cle in Sin­ga­pore and use an Is­lamic cost-plus profit ar­range­ment known as murabaha. — Reuters

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