Wednesday 21, February 2018 by Robin AmlĂ´t

Albaraka Turk Participation Bank issues Turkey's first Exchange-Listed Tier 1 Sukuk

Albaraka Türk Participation Bank (a subsidiary banking unit of Al Baraka Banking Group) has successfully issued Turkey’s first-ever Tier 1 perpetual Sukuk and the country’s first Basel 3 compliant publicly-listed Tier 1 instrument. This pioneering transaction marks a key milestone for the Turkish Participation Banking Sector and a significant and critical innovation for the Turkish Banking Sector.

The $205 million Sukuk was priced at a profit rate of 10 per cent and was privately placed amongst several regional and international banks. Meliksah Utku, General Manager of Albaraka Türk, stated, “As the first participation bank in Turkey, we are proud to have issued such an innovative transaction which once again re-affirms and reflects the pioneering ambitions of our institution.  The successful closure of our transaction will ensure that Albaraka Turk will be amongst the highest capitalized institutions in the Turkish banking sector and this puts us in a great position moving forward in re-enforcing our support for the Turkish economy.”

The Sukuk certificates were issued by Bereket One Ltd, a special purpose company, and are listed on the Irish Stock Exchange.  Malek Temsah, Assistant General Manager of Treasury and Financial Institutions further added, “Our hope is that this transaction will serve as a stepping stone for the Turkish banking sector at large to see the benefits of boosting capital vis-a-vis the issuance of such Basel 3-compliant hybrid instruments as a viable long-term capital raising alternative.”

Standard Chartered Bank, acting as Global Coordinator, was joined by Bank ABC, Emirates NBD, QInvest and Noor Bank, whom were the joint lead managers for the Sukuk offering.

Global law firm Norton Rose Fulbright advised Albaraka Türk) on the issuance. The Sukuk was admitted to the official list and to trading on the regulated market of the Irish Stock Exchange. The Norton Rose Fulbright team was led by Dubai-based partner Gregory Man with assistance from London-based partner Nikolai Mikhailov and senior associate Ganna Vlasenko.

Gregory Man, partner, commented, “As the first Basel III compliant tier one deal to come out of Turkey, and the first in Sukuk format, this is a milestone transaction for the market. Having worked with Albaraka Türk for a number of years we are delighted to bring such a significant transaction to successful close.

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