KUALA LUMPUR: Malaysian national mortgage firm Cagamas has sold 2.02 billion ringgit ($606.8 million) of Islamic bonds based on palm oil contracts, the company said.

The debt marries two of Malaysia's fastest-growing industries - Islamic finance and crude palm oil - and is based on the murabaha principle, under which a financier buys a commodity and sells it to the customer at a higher price.

The issue also seeks to tap a wealth of Gulf petrodollars which have shunned some Malaysian Islamic instruments on the basis that they do not fully comply with the Sharia.

The issue, with maturities ranging from one to 20 years, is the largest Islamic debt sale in Malaysia this year, Cagamas said.

The company also sold 540m ringgit of conventional bonds with maturies of between one and 20 years, a spokesman said.

"Cagamas's use of commodity palm oil as the underlying asset in structuring the commodity murabaha sukuk represents a departure from commodities traded on the London Metal Exchange which are typically used and introduces an acceptable asset alternative to the markets," the firm said.