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SINGAPORE: City Developments (CDL) will sell the first tranche of its S$1 billion denominated Islamic bond, or Sukuk, by the end of this year.
The property developer has tied up with Malaysian lender CIMB to issue the first corporate Sukuk offering in Singapore.
It also plans to list the Islamic bond on the Singapore Exchange by year-end and possibly a dual listing elsewhere.
CDL plans to use the multi-currency medium-term notes to fund new acquisitions and investments in the region.
Goh Ann Nee, CFO, City Developments, said: "In the next couple of months, we see that there might be potentials to pick up... distressed assets or companies that may need some help."
Under the deal, CDL will sell and lease back Shariah-compliant properties and pay investors from the rental income.
The property developer has not decided the terms of the Sukuk, which it is launching with Malaysia's CIMB. But it hopes it will raise CDL's profile to a wider base of international investors.
Despite the challenging global credit environment, CIMB is confident of strong demand for the Sukuk. It is targeting investors in Southeast Asia and the Middle East, including non-Islamic investors.
Badlisyah Abdul Ghani, head of Islamic Banking, CIMB Group, said: "We would definitely want to target the traditional fixed income investors that are in the market. They have been increasingly becoming more aware of the benefits of investing in Sukuk." - CNA/vm
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