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Mobilink tests credit guarantee for sukuk

ISLAMABAD: Mobilink – the country’s largest telecommunications operator, plans to raise 6.9 billion rupees ($68.6 million) via Islamic bonds this quarter, Pakistan Credit Rating Agency said in a statement.

The sukuk, which will be listed, have been rated AA by the rating agency and will include a partial credit guarantee of 966 million rupees.

The sukuk would help fund the network expansion of Mobilink, a wholly owned subsidiary of Global Telecom Holding, which is in turn majority-owned by Russia’s VimpelCom.

The credit guarantee will be extended by Mauritius-based GuarantCo, a specialised financial guarantor indirectly owned by the development agencies of Britain, Switzerland, Sweden and the Netherlands.

Credit guarantees for sukuk are rare because of the profit-sharing nature of Islamic finance, but they could prove to be an important development, attracting a wider range of corporate and sovereign issuers to the Islamic bond market.

Last month, Export Development Canada helped secure $78 million for a deal involving the lease of four Bombardier planes to Ethiopian Airlines, the first sharia-compliant transaction in Africa’s aviation sector.

Britain’s export credit agency expects to guarantee a sukuk issued by a Gulf-based customer of European plane maker Airbus early this year. -Reuters

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