Turkey’s state grain board is planning a debut issue of as much as 600 million liras ($200 million) of Shariah-compliant sukuk bonds, three people with knowledge of the matter said.
The Ankara-based regulator of the domestic grain market, also known as TMO, will use part of the sale for grain purchases from farmers, the people said, asking not to be named because the plan isn’t public. The board, an affiliate of the agriculture ministry, has hired an investment bank to manage the sale, the people said, without naming the adviser. Maturity could be between six months to a year, the people said.
The board, formally known as Toprak Mahsulleri Ofisi, aims to help create a sukuk market based on commodities with the sale, according to two of the people. The institution has been working for about a year on the plan, they said. TMO’s plans come at a time when Turkish Treasury also plans to sell about 1.6 billion liras of sukuk in February, according to the Ankara-based institution’s borrowing plans. Global sales of sukuk fell 11.2 percent to $64.8 billion in 2015, according to data compiled by Bloomberg.
An executive for TMO, who asked not to be named because of policy, declined to comment. E-mailed questions for comment to the board weren’t immediately answered.