Ağaoğlu to issue sukuk

LONDON - Reuters

The Ağaoğlu Group, headed by the flamboyant mogul Ali Ağaoğlu, plans to issue sukuk bonds. AA Photo

The multi-sector Ağaoğlu Group plans to raise around $300 million by issuing sukuks, or Islamic bonds, thus becoming the latest Turkish company seeking to tap the market for dollar-denominated Islamic debt.

Turkey has been keen to develop its Islamic finance sector, and as part of this effort the government issued sukuks for the first time in 2012, also amending sukuk rules to encourage banks to move into the sector.

Until now, Turkey has only seen significant sukuk issuance from the government and the country’s four Islamic banks, known as participation banks.

Finance center plans

Last year, Ağaoğlu raised 100 million Turkish Liras via one-year sukuks, but he now wants to tap the international sukuk market, which has a preference for dollar-denominated money.

“Our plan is to do around $300 million in sukuks, and we would like to do it with an international institution this time in order to attract a wider range of investors,” Niyazi Albay, Ağaoğlu’s chief investment officer, told Reuters.

Last month, conglomerate Doğuş Group received regulatory approval to raise $370 million via sukuk in what would be the first dollar-denominated corporate transaction of the kind in the country.

Ağaoğlu Group has previously said it plans to gradually borrow $2 billion through sharia-compliant debt instruments, in part to help build the Istanbul International Finance Center.