Kazakh Development Bank Swaps Ringgit Sukuk Proceeds to Dollars

Development Bank of Kazakhstan JSC, which issued the country’s first ringgit-denominated bond, swapped the proceeds from the sale into U.S. dollars.

The 240 million-ringgit ($76.7 million) five-year murabaha Islamic note, which was priced to yield 5.5 percent, was swapped into $76 million at a 4.95 percent yield as part of an agreement with Royal Bank of Scotland Group Plc, the Astana-based bank said in a statement published on the Kazakhstan Stock Exchange’s website today. The swap comes due in August 2017, according to the state-owned lender.

Development Bank of Kazakhstan sold debt denominated in the Malaysian currency in July, according to data compiled by Bloomberg. Murabaha is a financing structure acceptable under Sharia, or Islamic religious law.

To contact the reporter on this story: Nariman Gizitdinov in Almaty at ngizitdinov@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net