Sichuan Development hires banks for $300mn sukuk
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