Feb 3 (Reuters) - Karachi-based utility K-Electric will test a seven year tenor for its latest Islamic bond, a 22 billion rupee ($217 million) transaction that would be Pakistan’s largest corporate sukuk to date.
Issuance of corporate sukuk is gathering pace, helping broaden Pakistan’s Islamic capital market, which in recent years has relied on the government for the bulk of such deals.
Proceeds from the sukuk will help refinance debt, with approximately 18 billion rupees to be repaid to senior lenders including the International Finance Corporation and the Asian Development Bank, K-Electric said in a bourse filing.
Last year, the utility raised 6 billion rupees through a three-tranche sukuk, investment certificates which follow Islamic religious principles such a ban on interest and gambling.
Previously, Pakistan’s largest corporate sukuk was Liberty Power’s 12-year, 13.5 billion rupee issue done in 2009.
The current pipeline of sukuk includes Pakistan Mobile Communications (Mobilink) and Bank Islami Pakistan . ($1 = 101.2000 Pakistani rupees) (Reporting by Bernardo Vizcaino; Editing by Eric Meijer)