Kuveyt Turk issues $350 million worth rent sukuk for Turkey to be used for investment and project financing

Kuveyt Türk has just issued its second Islamic sukuk security by pioneering the first rent certification for Turkey. This $350 million transaction will be used toward investment and project financing, according to the company’s statement yesterday.
“Kuveyt Türk’s two sukuk structures have received considerable interest. They are an important source for Turkey’s long-term development aspirations,” said Kuveyt Türk’s Board of Directors’ President Mohammed al-Omar.

Sukuks are the Islamic equivalent of bonds. Interest-bearing bonds are not permissible in Islam, so sukuk securities are structured to comply with Islamic law and its investment principles.

Rent certification bonds, specifically, are certificates of equal value that prove undivided ownership of the certificate holders to the leased asset and/or services and rights to the rental receivables from the said leased asset and/or services.

Kuveyt Türk’s General Manager Ufuk Uyan said at the signing ceremony that the rent certification security’s most noteworthy aspect is its competitive pricing and in the days ahead they plan to spearhead new such securities with the inclusion of the corporate sector.

Wednesday, November 23, 2011
SOURCE: HURRIYET DAILY NEWS