By Sharen Kaur
KUALA LUMPUR: MALAYSIA'S dual-tranche USD1.5 billion (RM5.48 billion) sukuk - its first bond sales since 2011 - is a hit with orders of USD9 billion from Asia, Europe, the Middle East and the United States.
This reflects foreign investors' confidence in the country's financial and political health over the long term.
The sukuk, which is expected to be assigned ratings of "A-" by Standard and Poor's Ratings Services and "A3" by Moody's Investors Services Ltd, was split into a USD1 billion 10-year tranche and USD500 million 30-year offering issued via a special purpose entity, Malaysia Sovereign Sukuk Bhd (MSSB).
MSSB employed a structure utilising syariah-compliant commodities, leasable assets and non-physical income-generating assets, a world's first for sovereign sukuk.
In a statement, the Finance Ministry said the deal was oversubscribed with an aggregate interest of over USD9 billion from a combined investor base of more than 450 accounts.
The 10-year tranche was oversubscribed by almost seven times, while the 30-year tranche was oversubscribed by about six times.
The deal was priced at the tighter end of the revised price guidance, reflecting investors' confidence, strong external position, monetary flexibility, fiscal sustainability as well as the diversified and competitive Malaysian economy, the ministry said.
Reuters reported that the 10-and 30-year sukuks were priced at 115 basis points (bp) and 170bp over US Treasuries, respectively, representing a tightening of 20bp and 15bp from the given price guidance.
Meanwhile, the ministry said the offering marked Malaysia's fourth US dollar-denominated sovereign global sukuk issuance, following its successful global sukuk issuances in 2002, 2010 and 2011.
Proceeds from the offering would be used for syariah-compliant general purposes specifically for the redemption of 1Malaysia Sukuk Global Bhd's USD1.25 billion trust certificates due in June and to finance development expenditures.
"We are delighted to bring this ground-breaking sukuk to the growing Islamic finance market. We are extremely pleased with the success of this deal and the confidence of the global investors in the Malaysian credit story," said Treasury secretary-general Tan Sri Dr Mohd Irwan Serigar Abdullah.
CIMB Investment Bank Bhd, The Hongkong and Shanghai Banking Corp Ltd and Standard Chartered Bank acted as the joint bookrunners and joint lead managers for the global sukuk offering.
KUALA LUMPUR: MALAYSIA'S dual-tranche USD1.5 billion (RM5.48 billion) sukuk - its first bond sales since 2011 - is a hit with orders of USD9 billion from Asia, Europe, the Middle East and the United States.
This reflects foreign investors' confidence in the country's financial and political health over the long term.
The sukuk, which is expected to be assigned ratings of "A-" by Standard and Poor's Ratings Services and "A3" by Moody's Investors Services Ltd, was split into a USD1 billion 10-year tranche and USD500 million 30-year offering issued via a special purpose entity, Malaysia Sovereign Sukuk Bhd (MSSB).
MSSB employed a structure utilising syariah-compliant commodities, leasable assets and non-physical income-generating assets, a world's first for sovereign sukuk.
In a statement, the Finance Ministry said the deal was oversubscribed with an aggregate interest of over USD9 billion from a combined investor base of more than 450 accounts.
The 10-year tranche was oversubscribed by almost seven times, while the 30-year tranche was oversubscribed by about six times.
The deal was priced at the tighter end of the revised price guidance, reflecting investors' confidence, strong external position, monetary flexibility, fiscal sustainability as well as the diversified and competitive Malaysian economy, the ministry said.
Reuters reported that the 10-and 30-year sukuks were priced at 115 basis points (bp) and 170bp over US Treasuries, respectively, representing a tightening of 20bp and 15bp from the given price guidance.
Meanwhile, the ministry said the offering marked Malaysia's fourth US dollar-denominated sovereign global sukuk issuance, following its successful global sukuk issuances in 2002, 2010 and 2011.
Proceeds from the offering would be used for syariah-compliant general purposes specifically for the redemption of 1Malaysia Sukuk Global Bhd's USD1.25 billion trust certificates due in June and to finance development expenditures.
"We are delighted to bring this ground-breaking sukuk to the growing Islamic finance market. We are extremely pleased with the success of this deal and the confidence of the global investors in the Malaysian credit story," said Treasury secretary-general Tan Sri Dr Mohd Irwan Serigar Abdullah.
CIMB Investment Bank Bhd, The Hongkong and Shanghai Banking Corp Ltd and Standard Chartered Bank acted as the joint bookrunners and joint lead managers for the global sukuk offering.
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