SINGAPORE, Aug 21, 2008 (AFP) – Singapore property developer City Developments Thursday inked a deal with Malaysian financial group CIMB in a bid to raise one billion Singapore dollars (704 million US) through the issuing of Islamic bonds.

City Developments hopes to have the first tranche of the issue on the market by the end of the year, the company said. CIMB is lead manager for the issue.

The signing followed the announcement last week by City Developments that it planned the unsecured Islamic bond offering.

“This is the first Islamic unsecured financing transaction of its kind in Singapore,” said Kwek Leng Joo, City Developments managing director.

The city-state has been trying to grow its share of the Islamic finance market.

He said the Islamic bond offering will boost City Developments’ coffers and enable it to tap opportunities during an emerging global economic slowdown.

“We always believe that in the midst of any economic slowdown, there are tremendous opportunities to explore and take advantage of,” Kwek said.

City Developments is one of Singapore’s leading property developers and also has interests in hotels.

Islamic banking fuses principles of sharia, or Islamic law, and modern banking. Islamic funds are banned from investing in companies associated with tobacco, alcohol or gambling, considered taboo by Muslims.

According to CIMB, the Islamic bond market is holding up despite global economic woes.

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