International law firm Baker & McKenzie has advised Bahrain’s Gulf International Bank (GIB) on the establishment of its 3.5 billion Malaysian ringgit ($1.1 billion) Islamic medium term note programme for the potential sale of Islamic bonds, or sukuk.

Standard Chartered and Malaysia's CIMB Investment Bank are the lead arrangers on the medium-term notes programme, while GIB Capital is the international coordinator. Any eventual sukuk issue will be under a wakala structure, where certificates are issued through a special purpose vehicle which purchases specific assets which are then given to an agent, usually the originator, to manage.

The Baker & McKenzie team was jointly led by partner, Azizul Adnan from the Malaysia office and associate Umera Ali from the Bahrain Office.

“Malaysia has become an increasingly attractive market for international Sukuk and bonds issuances due to its deep liquidity and we are delighted to have assisted GIB in their first ever Malaysian Sukuk and look forward to working with them on similar transactions in the future,” Adnan said.

Gulf issuers are increasingly targeting options in Malaysia to diversify funding sources away from dollar financing. National Bank of Abu Dhabi and Abu Dhabi National Energy Co have also issued in ringgit in response to high demand from Malaysian investors looking to gain international exposure in local currency.

GIB had previously established a EuroMedium Term Note Programme listed on the London Stock Exchange and issued two conventional bonds in the Saudi market. This sukuk programme will give GIB an opportunity to tap into the Islamic capital market whenever it chooses, the statement added. ALB

Shaheen Pasha is Middle East Regional Editor at ALB. Follow her on Twitter: @ALB_TheBrief.

Other related stories:

• Bakers advises United Steel Co on steel plant financing
• Bakers, Maples and Calder advise Banque Saudi Fransi's sukuk programme