IDBB, BLNG To Launch First Islamic Bond
By James Kon

Bandar Seri Begawan - Brunei Darussalarn will soon be able to realise its ambition of developing its own Islamic capital market with the establishment of the first Brunei Darussalarn Sukuk AlIjarah or Islamic bond between Brunei LNG Sdn Bhd, Islamic Development Bank of Brunei Berhad (IDBB) and IDBB Sukuk Inc.

The landmark signing ceremony between BLNG and Islamic Development Bank of Brunei Berhad (IDBB) to pave the way for the issuance of Brunei's premier Islamic bond under the Islamic concept of Sukuk Al-Ijarah took place at the Empire Hotel and Country Club, yesterday afternoon.

Present to witness the signing ceremony was Pehin Dato Haji Awang Abd Rahman bin Dato Haji Mohd Taib, Minister of Education.

On behalf of BLNQAwang Haj i Mohd Said bin Ahmad, Acting Managing Director, signed on the dotted line while representing IDBB was Pengiran Datin Hajah Urai binti PengiranAli, Managing Director.

Awang Haji Mohd Said, in his welcoming remarks, said for BLNG Sukuk Al-Ijarah is a means of providing funds to finance major capital investment projects under the company's Asset Reference Plan and this acts as an alternative to utilising the shareholder's fund.

The initiative for the first Brunei Darussalarn Sukuk Al-Ijarah, he said, is also in line with Brunei Darussalam's aspiration to develop the country as an international financial centre.

He also hoped that by raising finance locally, the local bank's expertise in issuing Islamic bonds could be developed further. It could also provide greater public awareness on Islamic fund investments. At the same time, the project would facilitate the groundwork for future external financing requirements that are Syariah compliant.

Pengiran Datin Hjh Urai, in her welcoming speech, explained that Sukuk or Islamic bond is an instrument that meets all the economic objectives of fixed income securities without breaching the fundamental principles of the Syariah because it is Riba free, marketable, liquid, easily transferred and traded, asset-backed, collateralised and versatile that allows for structuring across legal and tax domains for diverse financing needs.

The Managing Director of IDBB disclosed that the AlIjarah Agreement between BLNG; IDBB and IDBB Sukuk Inc is based on B$100 million and has a six-year life span with profit payment on a semi-annual basis.

According to Pengiran Datin Hjh Urai, the project to develop the first Brunei Sukuk or Islamic bond by Brunei LNG began last year and three local banks and a foreign bank were selected by Brunei LNG to participate in the bid for B$100 million Islamic Sukuk Al-Ijarah to finance one of Brunei LNG Assets. Brunei LNG awarded the bid to IDBB as the sole financier, she added

She also said that the Sukuk would be offered to government institutions, banks & financial institutions, the general public and to IDBB Perdana world customers.

To help the public understand more about the Islamic bond, a road show will be tentatively launched on December 1, 2005. The bond will close on December 14, 2005. -- Courtesy of Borneo Bulletin

Click Here To Have Your Say On This Story

Brudirect.com News

Brunei's Fastest Growing Website with