Cima to issue Islamic bonds

Malaysia: Cement Industries of Malaysia Bhd. said Monday its Negeri Sembilan Cement Industries Sdn. Bhd. subsidiary has received regulatory approval to issue 330 million ringgit ($1=MYR3.80) in Islamic notes and bonds.  Negeri Sembilan Cement, will issue up to MYR130 million in seven-year bonds, Cement Industries said in an exchange filing.  Negeri Sembilan Cement will also issue five tranches of notes and bonds with maturities of one to five years worth MYR200 million.  AmMerchant Bank is the principal adviser and lead manager of the debt issues.  Proceeds will be used to partly repay a MYR360 million bridging loan facility from AmMerchant Bank, Cement Industries added.

Islamic bonds are structured along religious principles, with the requirement that the issuer must be involved in activities deemed legitimate under Islam. Since Islam forbids interest payments, bonds may either carry a zero coupon or pay a profit rate.