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Al-Rajhi Cement- Jordan issues first Islamic Sukuk in Jordan  Join our daily free Newsletter

MENAFN Press - 21/04/2011

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(MENAFN Press) Capital Investments “ the investment banking arm of Capital Bank offering comprehensive financial and investment services “ has managed and arranged the first issuance of Islamic Sukuk in Jordan for the benefit of Al-Rajhi Cement “ Jordan.

The JD 85 million, 7-year Sukuk was subscribed for by a number of leading Islamic and commercial banks, including Capital Bank, Cairo Amman Bank, Islamic International Arab Bank, Union Bank, Jordan Kuwait Bank, Bank of Jordan, and Arab Islamic Bank.

Capital Investments announced this landmark transaction during a launch ceremony which was attended by Al-Rajhi Cement “ Jordan Chairman Omar Bin Sulaiman Al-Rajhi and Central Bank of Jordan Governor H.E. Faris Sharaf, alongside chairmen and representatives of the participating banks, including Cairo Amman Bank Chairman Khaled Al-Masri, Arab Bank Chief Executive Officer Nemeh Sabbagh, representing Islamic International Arab Bank, Union Bank General Manager H.E. Nadia Al Saeed, Arab Islamic Bank General Manager Atiyeh Shananier, Jordan Kuwait Bank Deputy General Manager Tawfiq Mukahal, and Bank of Jordan Deputy General Manager Mohammad Hamdan, together with Chairman of Capital Bank and Capital Investments H.E. Basem Khalil Al Salem. The event was also attended by a number of local and Arab media representatives.

Highlighting the significance of this transaction, Al Salem expressed great confidence in Jordan's resilient economy, which he said is built on solid foundations that enable it to flexibly accommodate regional economic and political fluctuations. He also lauded the progressive pro-investment policies adopted by the country, and underscored the role of the participating institutions as major market players contributing to the sustainable growth in the national economy.

H.E. Al Salem thanked both the Government and the Central Bank of Jordan for their invaluable support and dedicated efforts in opening the Jordanian capital market to new investment instruments and Islamic finance transactions in particular, creating new means of capitalizing on lucrative investment opportunities in the Kingdom.

Al-Rajhi Cement “ Jordan's Chairman, Omar Bin Sulaiman Al-Rajhi, praised Jordan's Government and national institutions for their efforts in creating a positive investment environment and supporting the implementation of economically viable investments in the Kingdom. He also thanked them for their support for the issuance of the first Sukuk in Jordan, thus enabling the company to adhere to its commitment to aligning its financing activities with Islamic Shari'a law.

The Sukuk were structured based on the Ijara (leasing) principle, through which the benefit in the underlying leased assets is represented by the issued Sukuk (securities).

Al-Rajhi Cement “ Jordan was established as a private shareholding company in 2006 and is wholly owned by Al-Rajhi Cement Holding Ltd, which is registered in the Dubai International Financial Centre. Al-Rajhi Cement “ Jordan established and operates a cement manufacturing plant in Al-Mafraq, Jordan, which commenced distribution of its products in the local market during 2010.

In turn, Capital Investments' CEO Omar Al Wir communicated his pride in the cooperation that brought together leading financial institutions to introduce Sukuk for the first time in the local market, stating that "We hope that this alliance will pave the way for future successful Islamic finance transactions in the Kingdom."

Al Wir also commended the General Ifta' Department's efforts in facilitating the Shari'a-compliant structuring of the Sukuk and its contribution to the successful closing of this landmark transaction. He also thanked Al-Tamimi & Company Advocates and Legal Consultants for their role as legal counsel for the transaction, noting the firm's extensive experience in Islamic finance transactions in the Gulf.

In addition, Omar Al Wir stated that this issuance corresponds to the growing interest in and appetite for Islamic financing instruments in the local market, and that it reflects the readiness of the Jordanian economy to accommodate developments in the regional and international markets, and the growing Islamic finance segment in particular.

"We appreciate Al-Rajhi Cement “ Jordan's confidence in Capital Investments, and are proud to have been appointed as the lead manager for this issuance," said Al Wir. "This achievement is a valuable addition to our track record in the Jordanian market, and we trust that our collaboration with Al-Rajhi will continue to support their ambitious expansion and investment plans in Jordan," he added.

About Capital Investment
Since 1995, Capital Investments has played a prominent role in the financial services landscape in Jordan through providing a wide range of world class financial services to corporations, governments and high net worth individuals. Today, Capital Investments is the premier investment bank in Jordan as it continues to maintain a leading position in its core business lines of Corporate Finance, Brokerage, Asset Management and Research.Capital Investments has a long history of innovation and superior customer service through its team of over 40 professionals who combine global exposure with a strong local track record.About Capital BankCapital Bank has been steadily expanding its operations since its inception in 1995, and boasts an authorized capital of JOD 150 million/shares. The Bank's capital adequacy ratio exceeds the requirements of the Basel Committee and the Central Bank of Jordan, and its operational efficiency is considered among the highest in the market. Characterized by its financial stability, Capital Bank achieved growth in deposits of 11%, reaching JOD 755 million by the end of 2010. In addition, the Bank boasts a high liquidity ratio in Jordanian Dinars, which amounts to 122% compared to the 100% requirement of the Central Bank of Jordan. The Bank also achieved exceptional growth in assets, which exceeded the JOD 1.2 billion mark at the end of 2010, compared to JOD 1.075 billion at the end of 2009, registering a 12% growth. Capital Bank's ambitious and highly-qualified human resources and management team have achieved exceptional results in a number of areas, one of which is that Capital Intelligence awarded the bank a credit classification of BBB according to its January 2010 report. This news release has been distributed by Bidaya Corporate Communications on behalf of Capital Investments.


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