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MALAYSIA: Bank of
Tokyo-Mitsubishi UFJ (Malaysia) (BTMU Malaysia) has successfully issued
the world’s first yen-denominated Sukuk as one of the first two tranches
to be issued under the bank’s US$500 million multi-currency Sukuk
program. The program was launched in June this year as part of the bank’s
move to become the first Japanese commercial bank to issue Sukuk. Pricing
of the benchmark yen-denominated deal has not been disclosed, but BTMU
Malaysia has confirmed to Islamic Finance news (IFN) that it reflects investors’
confidence in the debut instrument (particularly JPY) and acceptability
of yen-denominated Sukuk as part of alternative investments.
The inaugural tranches to be issued under the program are a US
dollar-denominated Sukuk with aggregate nominal amount of US$25 million
and a yen-denominated Sukuk with aggregate nominal amount of JPY2.5
billion (US$23 million). Proceeds from the Sukuk, which have been issued
under the Shariah principle of Wakalah Bi Al-Istithmar, will provide a
platform for the bank to diversify its funding sources for its global
Islamic banking business based in Malaysia, and to attract different
investors in different currencies. The bank has told IFN that it hopes
the yen-denominated issuance will increase Japanese interest in Islamic
finance: “BTMU Malaysia hopes that this will trigger more issuance of
Sukuk by Japanese companies and promote Japanese investors investing in
Sukuk. This is also a part of BTMU Malaysia’s effort to support the
bilateral financial cooperation between Japan and Malaysia.”
Naoki Nishida, the president and CEO of BTMU Malaysia, is enthused about
the bank’s entry to the Islamic debt capital market: “We are very excited
to be the first in the world to issue a yen-denominated ‘Emas’ Sukuk.
This signals another first for a Japanese commercial bank to issue the
Sukuk out of Malaysia’s Islamic finance marketplace and in the global
market.”
The ‘Emas’ tag is the Malaysia designation given to foreign
currency-denominated Sukuk and bonds originating from Malaysia for the
global capital market. RAM Ratings has assigned the multi-currency Sukuk
Wakalah program a long-term rating of ‘AAA(bg)/stable’ and the issuances,
which were closed under private placement with institutional and
sophisticated investors, will mature on the 25th September
2015.
This September has become one of many firsts for BTMU Malaysia, which
earlier this month signed a US$100 million commodity Murabahah agreement
with the Islamic Corporation for the Development of the Private Sector
(ICD) to finance projects in ICD member countries; the first transaction
to be executed by BTMU Malaysia with a multilateral international
financial institution. The transactions signal BTMU Malaysia’s
development within the Islamic finance sector and the bank’s own network,
as highlighted by Go Watanabe, the CEO for BTMU Asia and Oceania: “This
landmark event reaffirms BTMU Malaysia’s strategic importance to the
global BTMU network and provides impetus for BTMU to achieve its
aspiration to be part of the global hub for Islamic finance within the
larger Mitsubishi UFJ Financial Group global network.”
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