PETALING JAYA: RHB Investment Bank Bhd (RHB IB) and Merrill Lynch & Co have been hired by GS Caltex Corp, South Korea’s second largest oil refiner, to sell what could be that country’s first sukuk issue.
Sukuk is an Islamic financial instrument that is similar to a bond.
According to Bloomberg, Seoul-based GS Caltex plans to raise as much as RM1bil from bonds in US dollars and ringgit but the decision on whether it will be a sukuk or conventional bond issue is not yet decided.
It quoted RHB IB chief executive officer Chay Wai Leong as saying: “GS Caltex came to us a few months ago, and because there have been no (South) Korean sukuk deals done ever, we have to go through the Ministry of Finance in (South) Korea to educate them on the Islamic structure.
“As to sukuk versus a conventional ringgit deal, we haven’t quite decided. We are still looking at all the pros and cons.”
Chay added that RHB IB would work with Merrill Lynch on GS Caltex’s dollar notes and manage the ringgit sale by itself.
RHB IB had previously arranged a three-year conventional bond issue worth RM220mil for the Export-Import Bank of Korea and also a bond issue for the Industrial Bank of Korea.
