The Islamic Bank of Thailand (I-Bank) plans to launch a "Sukuk Bond" worth as much as Bt5 billion with a yield of 4 per cent annually in the last quarter of this year. Dheerasak Suwannayos, president of I-Bank, said that the bond could have a tenure of five or seven years.
"The launch date will depend on market sentiment and the trend of interest rates," Dheerasak said.
He added that the bank would have to set aside Bt1 billion for a so-called green-shoe option for both institutional and individual investors now that there was "great feedback" to the bond subscription.
He added the return on the Sukuk Bond would depend on the government's five-year or seven-year Treasury bond, normally yielding around 4 per cent annually.
The I-Bank president said target buyers would be institutional investors, both domestic and international, including funds in Malaysia that do business in Thailand.
"If the Sukuk's first tranche generates a lot of interest, the bank might consider issuing Bt5 billion at the end of this year," he said, adding that proceeds from the bond issuance would be used for lending expansion and restructuring its capital base.
As to progress on acquiring Nava Leasing, Dheerasak said the bank had agreed to buy a 49-per-cent stake in Nava Leasing at |Bt1.2 each share, worth an estimated Bt400 million.
The bank will buy Nava Leasing from existing shareholders through increased capital shares and a tender offering.
The deal is also expected to be completed in the third quarter.