CIMB Islamic to raise RM5 billion with Basel III, Tier 2 sukuk programme

CIMB Islamic, the shariah-compliant unit of Malaysia's second largest bank, is preparing an Islamic bond programme to raise up to RM5 billion ($1.58 billion). The Basel III compliant sukuk programme, assigned a preliminary rating of AA+ by ratings agency MARC, will go towards replacing an existing RM2 billion Tier-2 sukuk and to fund working capital. The securities commission is still finalising approval and CIMB is not expected to issue sukuk from the programme any time soon. The company did not specify the range of maturities or sizes for sukuk under the programme. CIMB is currently in talks with two smaller banks to create a mega-Islamic bank.