Germany seeks Islamic finance

FRANKFURT: Germany wants to establish itself as a market for financial products that conform with Islamic law, the head of German financial regulator has said. “We are seeing great interest from investors in Islamic countries, who want to invest their money in Germany according to shariah principles,” Bafin president Jochen Sanio said at a conference on Islamic finance in Frankfurt recently. “We hope to soon welcome the first interested party that wants to start offering these products,” Sanio said. Though no financial institution has made the move so far, Germany’s 4.3 million Muslims, mainly from Turkey, represent a market with bigger potential than in any other European country.

RAM ratings for Malaysian firm

KUALA LUMPUR: Malaysia’s RAM Ratings has assigned respective long- and short-term ratings of AAA (stable outlook) and P1 to Pengurusan Air SPV Berhad’s Islamic Medium-Term Notes Program of up to 20 billion ringgit ($5.84 billion) in nominal value and Islamic Commercial Papers Program of up to 20 billion ringgit in nominal value; both facilities have a combined limit of 20 billion ringgit in nominal value. The company is a special-purpose vehicle set up as a wholly owned subsidiary of Pengurusan Aset Air Berhad (PAAB) to undertake the financing of the latter’s acquisition of water assets and their accompanying liabilities in Peninsular Malaysia and the Federal Territory of Labuan. The SPV will also be responsible for the subsequent development of the various state water operators’ infrastructure. The SPV’s income will be solely derived from the Ijarah rental payable by PAAB, which will be used to service the company’s debt obligations.

Dubai bond attracts $6.4bn

DUBAI: Dubai’s five-year Islamic bonds book closed last Wednesday, with the dollar tranche attracting $4.9 billion and the dirhams tranche receiving 5.4 billion dirhams ($1.47 billion), a banker involved in the deal told Reuters. Earlier another banker said the price guidance on Dubai’s new five-year Islamic bond issues was set at 375 basis points over benchmarks. The government of Dubai launched a $6.5 billion bond plan last fortnight, consisting of $4 billion euro medium term notes and a $2.5 billion Islamic bond program.