RAM Ratings involved in numerous “firsts” and landmark-issues in the Malaysian debt market

Published on 16 February 2015 Against the backdrop of Malaysia’s flourishing debt market – one that has been a viable source of financing for foreign issuers as well as the issuance of sukuk - RAM Ratings has had the distinction of having rated numerous landmark deals. Several RAM-rated foreign issuers made their debut in the ringgit bond market in 2014, including the first European entity, i.e. Turkiye Finans Katilim Bankasi, with its RM3 billion Sukuk Murabahah MTN Programme (via financing conduit TF Varlik Kiralama A.S.). Another newcomer was CIMB Thai Bank Public Company Limited, with its RM2 billion Tier-2 Subordinated Debt Programme. “CIMB Thai is the first Thai entity to issue capital securities in Malaysia. RAM is pleased to play a part in this positive development in ASEAN cross-border funding – a key initiative of the ASEAN Economic Community,” said Foo Su Yin, CEO of RAM Ratings.  RAM’s dominance in rating sukuk transactions is also highlighted by its rating of Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad’s USD500 million Multi-Currency Sukuk Wakalah Bi Al-Istithmar Programme - the world’s first sukuk issued by a Japanese commercial bank. Another RAM-rated issuer of note is AmIslamic Bank Berhad, which issued the first Basel III-compliant sukuk in Malaysia, valued at RM3 billion.  Based on data from Bank Negara Malaysia (BNM), gross PDS issuance in Malaysia amounted to RM85.5 billion in 2014. This was 1.9% higher than the previous year’s RM83.9 billion, despite higher financing costs following BNM decision to raise the Overnight Policy Rate by 25 bps in July 2014. Financial institutions (FIs) played a major role in boosting the domestic PDS market last year, accounting for 59%  of total PDS issuance.  There was significant capital raising by FIs, including Malayan Banking Berhad’s up to RM10 billion Additional Tier-1 Capital Securities Programme – the first Basel III AT1 programme set up in Malaysia, as well as subordinated debt programmes established by several other FIs. Top RAM-rated Issuers by Programme Value (2014)  Issuer Assigned Rating Programme Value (RM bil)  Malayan Banking Berhad AAA 10.0  Maybank Islamic Bank Berhad AAA 10.0  Hong Leong Bank Berhad AA2 10.0  Public Islamic Bank Berhad AAA 5.0  TF Varlik Kiralama AS (Turkey) AA3 3.0  Midciti Sukuk Berhad AAA 3.0  IJM Corporation Berhad AA3 3.0 Moving forward, we expect RM85 billion-RM95 billion of gross issuance in 2015, mainly supported by financing for infrastructure projects and further capital-raising efforts by FIs. RAM’s league tables for sukuk and conventional PDS in 2014 are dominated by Malaysia’s 2 banking giants - Maybank Investment Bank (MIB) and CIMB Investment Bank (CIMB IB). MIB emerged in the top spot after having arranged close to RM25 billion or 33.6% of the RM74.4 billion of RAM-rated PDS and sukuk last year. Meanwhile, CIMB IB led the pack in terms of the largest number of PDS and sukuk issues arranged (13). Although MIB took pole position as the arranger with the highest value of sukuk deals - about RM14.5 billion (33.8% of the sukuk rated by RAM) – it shared the spotlight with CIMB IB in terms of the highest number of sukuk transactions arranged (7 each, representing 40% of all of RAM-rated sukuk issues). In the meantime, Hong Leong Investment Bank Berhad was the newcomer among the top 3 names in RAM’s in league table on PDS and sukuk issues by programme value, after having arranged the RM10 billion Sub Bonds of its sister bank, Hong Leong Bank Berhad. RAM Lead Managers’ League Table for PDS and Sukuk Issues for the year ended 31 December 2014 - by Programme Value Rank Lead Manager Programme Value (RM) %  1  Maybank Investment Bank Berhad  24,992,142,857 33.6%  2  Hong Leong Investment Bank Berhad  10,575,000,000 14.2%  3  CIMB Investment Bank Berhad  8,793,809,524 11.8%  4  AmInvestment Bank Berhad  7,107,142,857 9.6%  5  Public Investment Bank Berhad  5,000,000,000 6.7%  TOTAL TOP 5 56,468,095,238 75.9%  TOTAL 74,400,000,000 100.0% RAM Lead Managers’ League Table for PDS and Sukuk Issues for the year ended 31 December 2014 - by Number of Issues Rank Lead Manager Number of Issues %  1  CIMB Investment Bank Berhad 13 22.8%  2  Maybank Investment Bank Berhad 10 17.5%  3  RHB Investment Bank Berhad 7 12.3%  4  AmInvestment Bank Berhad 5 8.8%  5  Standard Chartered Bank Malaysia Berhad 4 7.0%  TOTAL TOP 5 39 68.4%  TOTAL 57 100.0% RAM Lead Managers’ League Table for Sukuk Issues for the year ended 31 December 2014 – by Programme Value Rank Lead Manager Programme Value (RM) %  1  Maybank Investment Bank Berhad  14,468,333,333 33.8%  2  AmInvestment Bank Berhad  5,500,000,000 12.8%  3  Public Investment Bank Berhad  5,000,000,000 11.7%  4  CIMB Investment Bank Berhad  4,100,000,000 9.6%  5  RHB Investment Bank Berhad  3,666,666,667 8.6%  TOTAL TOP 5  32,735,000,000 76.4%  TOTAL 42,860,000,000 100.0% RAM Lead Managers’ League Table for Sukuk Issues for the year ended 31 December 2014 – by Number of Issues Rank Lead Manager Number of Issues %  1  Maybank Investment Bank Berhad 7 20.0%    CIMB Investment Bank Berhad 7 20.0%  2  RHB Investment Bank Berhad 5 14.3%  3  AmInvestment Bank Berhad 3 8.6%    HSBC Amanah Malaysia Berhad 3 8.6%  4  Standard Chartered Saadiq Berhad 2 5.7%  5  Public Investment Bank Berhad 1 2.9%    Hong Leong Islamic Bank Berhad 1 2.9%    United Overseas Bank (Malaysia) Berhad 1 2.9%    Affin Hwang Investment Bank Berhad  (formally Affin Investment Bank Berhad) 1 2.9%    Kenanga Investment Bank Berhad 1 2.9%    Hong Leong Investment Bank Berhad 1 2.9%  OCBC Al - Amin Bank Berhad 1 2.9%  Alliance Investment Bank Berhad 1 2.9%  TOTAL TOP 3 19 54.3%  TOTAL 35 100.0% The RAM League Tables list lead managers by the value and number of deals for all RAM-rated bonds. Credit is given to the entire debt programme regardless of the type of instrument, as long as the debt had been issued during the period, either in full or in part. Please refer to our website for further details on the full league table and criteria for the RAM League Tables. Media contact: Ang Swee Ee +603 7628 1054 sweeee@ram.com.my