Emlak Katılım Issued Its First Partnership-based Sukuk of Turkey

Regional Economy 24.03.2021, 13:55 24.06.2021, 11:44
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Emlak Katılım Issued Its First Partnership-based Sukuk of Turkey

Türkiye Emlak Katılım Bankası issued the first labor-capital partnership-based sukuk over the Private Fund Account Pool worth around TRY 47 million.

In its announcement, Türkiye Emlak Katılım Bankası stated that it issued the first labor-capital partnership-based sukuk of Turkey over a Private Fund Account Pool, participation banking specific fund collection method.

The sukuk, which has a total maturity of 455 days and is worth around TRY 47 million, was issued through Emlak Katılım Varlık Kiralama A.Ş. (Emlak VKŞ), a 100% subsidiary of Emlak Katılım.

The fund extended from the partnership-based lease certificate will be utilized in murabahah, leasing, participation account, and investment tools in line with the principles of participation finance in the Private Fund Account Pool, and it will be professionally managed on behalf of Emlak VKŞ.

Investors will be able to be a partner to the income of the Private Fund Account Pool by purchasing partnership-based lease certificates through Emlak VKŞ, and the profit to be generated in the Private Fund Account Poll on the maturity date and/or term yield payment dates will be shared with the investors.

"Capital market instruments that are based on partnership and risk-sharing are important for us"

Nevzat Bayraktar, General Manager at Türkiye Emlak Katılım Bankası AŞ, talked about the importance of lease certificates as fund collection tools for participation banks and stated that they had issued 49 leased certificates worth around TRY 7.6 billion since April 2020.

Pointing out that they attach importance to risk sharing and partnership-based products that are more suitable for the essence of participation finance, as well as to find a place in the market and develop, Bayraktar added:

"We issued the first labor-capital partnership-based sukuk of Turkey worth around TRY 47 million with 455 days of maturity, and 5 term profit share payment from the funds that we collected on March 17-18. We are quite happy about this, actually. This issuance differs from other lease certificate issuances in the market as it allows investors to establish labor-capital partnership (mudarabah) with Emlak Katılım."

Bayraktar also stated that they would continue to develop capital market instruments in line with the principles of participation finance and contribute to improving the sector by increasing their issuances in parallel with the increase in their branches and growing their presence under the lease certificate issuance limit approval of TRY 15 billion from the Capital Markets Board in February 2021.

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