Turkey’s Fleetcorp gets approval for 150 mln lira Islamic bond

Turkey’s Fleetcorp gets approval for 150 mln lira Islamic bond

Turkey’s Fleetcorp, wholly-owned by Kuwait’s The International Investor, has received regulatory approval to raise up to 150 million lira ($66.2 million) via Islamic bonds, or sukuk, the Capital Markets Board said.

Fleetcorp, one of the five largest leasing firms in the country with a fleet of 15,000 vehicles, set up a sharia-compliant issuance programme in 2012, arranged by Aktif Bank. No time frame for the deal was given.

International Finance Corp, the World Bank’s lender to the private sector, said in March it was considering buying up to 30 million lira worth of Islamic bonds to be issued by FleetCorp, with maturities of up to three years.

Issuance of corporate sukuk is rare in Turkey, but is key to broadening the country’s Islamic capital market. So far the bulk of sukuk issuance has come from the government and the country’s four Islamic banks, known as participation banks.

This is gradually changing: In September, Aktif Bank received approval to issue 200 million lira in Islamic bonds, while Doğuş Group was given the nod in August to raise $370 million via sukuk.

Turkey is seeking to build a bigger role in the industry and forge closer ties with fast-growing economies in the Gulf and southeast Asia, the traditional centers of Islamic finance.

The Turkish government is also encouraging three state-run banks, Ziraat, Vakıfbank and Halkbank to set up their own Islamic banking operations.