First Resources sells US$190.81 million Sukuk in rare Singapore-linked issuance (By IFN)

GLOBAL: Palm oil company First Resources issued a RM600 million (US$190.81 million) Sukuk, in a rare Shariah compliant offering from a Singapore firm.

The company, which is based in Singapore but is principally involved in palm oil operations in Indonesia, issued the Islamic medium term notes (IMTN) from its RM2 billion (US$635.87 million) program. The IMTNs have a tenor of five years and will mature on the 31st July 2017.

Issued on a bookbuilding basis, the IMTNs were upsized from an initial issue size of RM500 million (US$158.97 million). The papers, bearing a profit rate of 4.45%, were oversubscribed 3.8 times.

Proceeds from the company’s maiden Malaysian ringgit-denominated issuance will be used for its Shariah compliant general corporate purposes and for the expansion of its plantations in Indonesia.

Malaysia’s OSK Investment Bank and RHB Investment Bank acted as the joint principal advisors, joint lead arrangers for the transaction, while also acting as joint lead managers and bookrunners for the distribution of the IMTNs in Malaysia. Meanwhile, DMG & Partners Securities and RHB Bank’s Singapore branch were appointed international dealers for the distribution of the notes outside Malaysia.

“The successful Sukuk issuance by First Resources is a testament of the breadth and depth of our Malaysian debt capital market which is supported by ample liquidity. It is also a reflection of the growing sophistication of our local investors and we expect the demand for regional quality corporate debt papers to continue to rise,” said U Chen Hock, CEO of OSK Investment Bank.

Abdul Rani Lebai Jaafar, the managing director of RHB Islamic Bank, commented that the strong demand for First Resources’ issuance underscores the depth of the Islamic market.

The transaction also marks a milestone for RHB Investment Bank and OSK Investment Bank, which are in the midst of completing their merger, signalling that Malaysia’s latest merchant banking giant is in a strong position to manage more Shariah compliant deals, especially across the ASEAN region.

See: http://redmoney.newsweaver.co.uk/1ah2qpppfnvh38rwoni3wx?email=true&a=6&p=26283475&t=21746865