Malaysia’s Syarikat Prasarana Negara prices US$638.67 million-worth of Sukuk (By IFN)

MALAYSIA: Public infrastructure and transport firm Syarikat Prasarana Negara priced a RM2 billion (US$638.67 million) Sukuk Murabahah on the 29^th August 2012, as Malaysian issuers continue to dominate the global Sukuk market in the third quarter.

In a statement, Prasarana, which is wholly-owned by the Malaysian government, said that the Sukuk comprised RM1 billion (US$319.32 million) 10 and 15-year tranches which offer a profit rate of 3.77% and 4%, respectively.

Orderbooks for the offerings, which were open for just seven hours, reached RM1.6 billion (US$510.91 million) for the 10-year tranche and RM2 billion for the 15-year tranche.

CIMB Investment Bank was the sole lead arranger for the issuance; and sole lead manager and bookrunner for the 15-year tranche, while Kenanga Investment Bank and RHB Investment Bank were joint lead managers and bookrunners for the 10-year tranche.

“The Sukuk was priced at the mid-range of the final price guidance, which demonstrates strong investor appetite and ample liquidity in the market for high grade papers, reflected primarily by the strength of the government guarantee in the Sukuk. A broad range of investors participated in the offering including government agencies, financial institutions, fund managers, insurance companies and corporate accounts,” said Prasarana.

Proceeds from the 10-year tranche will be used for the early redemption of Prasarana’s redeemable RM1 billion Sukuk, also guaranteed by the government, while the 15-year tranche will be used for the company’s Shariah compliant capital expenditure.

According to Dealogic data, all Sukuk issuances in August this year were from Malaysian issuers, amounting to US$3.44 billion, while the global Sukuk market has seen US$10.07 billion-worth of issuances in the third quarter as at the 29^th August. The Prasarana issuance takes this to US$10.71 billion.