Kuwait Finance House (KFH), a leader in Islamic finance, said its Turkish subsidiary will launch a $500 million Islamic bond by the end of the year.
KFH chairman Mohammed Al Omar said the Islamic lender will issue the benchmark sukuk following the success of Turkey's first Islamic bond offering, from lender Kuveyt Turk in August.
The Kuveyt Turk sukuk fetched a yield of 5.25 per cent and was oversubscribed by investors from the Middle East, Asia and Europe.
Al Omar said he expects more wide scale issuance from Turkish companies as the government made moves to accommodate Islamic instruments.
Last year, the Capital Markets Board of Turkey (SPK), the regulatory and supervisory authority in charge of the securities markets, published a statement setting the legal ground for sukuk issues by Turkish companies.
Turkey, which is careful to preserve its secular stance on politics and finance, refers to sukuk as participation certificates and Islamic banks are called participation bank.
The country is increasingly being seen as a growth market for Islamic finance, bolstering its ties to the Middle East.
In January, Turkey's Istanbul Stock Exchange launched an index comprising 30 listed companies that comply with sharia banking principles.
In August, the Turkish subsidiary of Bahraini Islamic lender Al Baraka mandated banks for a $250mn sharia- compliant facility.
Article from Global Islamic Finance Magazine
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