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Sunday, 25 May 2008

Malaysia: Prasarana prices RM2b government guaranteed sukuk

KUALA LUMPUR: Syarikat Prasarana Negara Bhd has successfully priced its RM2 billion seven, 10 and 15-year sukuk issue which was guaranteed by the government.

The issue carries a semi-annual profit rate of 4.05% per annum for the seven-year series, 4.40% for 10 years and 4.65% for 15 years respectively.

In a statement yesterday, Prasarana said the initial orders received for the issue reached a high of RM8 billion and was four times over-subscribed. It said a broad range of investors, including insurance companies, fund managers and financial institutions participated in the issue, which was offered through a book-building process.

Prasarana chief executive officer Shaipudin Shah Harun said Malaysia had a vibrant sukuk market and the sukuk issue would enable Prasarana to remain on the radar screens of investors.

“Prasarana is pleased to return to the capital markets and looks forward to further financing opportunities to fund its expansion plans. The issue exhibits Prasarana’s full commitment to contribute to the further development of the sukuk market,” he said.

AmInvestment Bank Bhd and CIMB Investment Bank Bhd are the joint lead arrangers and joint lead managers for the sukuk issue.

The sukuk issue is based on the Syariah principle of Ijarah which entails a sale and leaseback of Prasarana’s railway assets, and the company would re-purchase the assets upon maturity of the sukuk.

“Prasarana’s obligations in relation to the payment of the rentals and the re-purchase price are guaranteed by the government. This is the first time that Prasarana is issuing securities based on Islamic principles and it underlines the growing significance of Islamic financing in the Malaysian financial system,” it said.

(Daily Edge, 23 May 08)

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