PLUS Bhd sold RM19.6 billion (US$6.2 billion) of Islamic bonds in Malaysia’s record corporate offering of the debt, pricing 19-year securities to yield 5 per cent, according to two people with knowledge of the deal.
The company issued RM11.3 billion of syariah-compliant notes with maturities ranging from five to 19 years, and has privately placed another RM8.3 billion due in 20 to 25 years, said the two persons who couldn’t be named because the information is confidential.
They said an additional RM11 billion of government-guaranteed debt will be sold later. State-controlled power producer Tenaga Nasional Bhd issued 20-year Islamic bonds in October at a yield of 4.9 per cent.
Sales of longer-dated debt may help set a benchmark for companies seeking funding for road and rail projects as part of the government’s US$444 billion development plan for the next decade. Companies in Malaysia have already issued RM44.6 billion of syariah-compliant debt this year, with almost 80 per cent due in less than 10 years, Bloomberg data show.
PLUS Bhd is taking over the local assets of Malaysia’s biggest toll-road operator PLUS Expressways Bhd in the first leveraged buyout using Islamic bonds, or sukuk. The company was set up by the Employees Provident Fund and state-owned UEM Group Bhd for the RM23 billion acquisition. Izzaddin Idris, chief executive officer of UEM, couldn’t be reached for comment when telephoned by Bloomberg today.
Orders for the RM11.3 billion portion totalled about RM50 billion, the two people said. PLUS sold the five-year Islamic bonds at 3.8 per cent and the 10 year at 4.3 per cent, they said.
The notes were provisionally rated AAA by Malaysian Rating Corp, the highest investment grade. CIMB Group Holdings Bhd, AMMB Holdings Bhd, Malayan Banking Bhd and RHB Capital Bhd were lead managers for the sale.
Average yields on global sukuk, which pay returns on assets to comply with Islam’s ban on interest, rose six basis points this month to 4.1 per cent on Dec 16, according to the HSBC/NASDAQ Dubai US Dollar Sukuk Index. The PLUS offering surpasses the previous Islamic bond record by a Malaysian company of RM12 billion by telecommunications company Binariang GSM Sdn in 2007. -- Bloomberg
The company issued RM11.3 billion of syariah-compliant notes with maturities ranging from five to 19 years, and has privately placed another RM8.3 billion due in 20 to 25 years, said the two persons who couldn’t be named because the information is confidential.
They said an additional RM11 billion of government-guaranteed debt will be sold later. State-controlled power producer Tenaga Nasional Bhd issued 20-year Islamic bonds in October at a yield of 4.9 per cent.
Sales of longer-dated debt may help set a benchmark for companies seeking funding for road and rail projects as part of the government’s US$444 billion development plan for the next decade. Companies in Malaysia have already issued RM44.6 billion of syariah-compliant debt this year, with almost 80 per cent due in less than 10 years, Bloomberg data show.
PLUS Bhd is taking over the local assets of Malaysia’s biggest toll-road operator PLUS Expressways Bhd in the first leveraged buyout using Islamic bonds, or sukuk. The company was set up by the Employees Provident Fund and state-owned UEM Group Bhd for the RM23 billion acquisition. Izzaddin Idris, chief executive officer of UEM, couldn’t be reached for comment when telephoned by Bloomberg today.
Orders for the RM11.3 billion portion totalled about RM50 billion, the two people said. PLUS sold the five-year Islamic bonds at 3.8 per cent and the 10 year at 4.3 per cent, they said.
The notes were provisionally rated AAA by Malaysian Rating Corp, the highest investment grade. CIMB Group Holdings Bhd, AMMB Holdings Bhd, Malayan Banking Bhd and RHB Capital Bhd were lead managers for the sale.
Average yields on global sukuk, which pay returns on assets to comply with Islam’s ban on interest, rose six basis points this month to 4.1 per cent on Dec 16, according to the HSBC/NASDAQ Dubai US Dollar Sukuk Index. The PLUS offering surpasses the previous Islamic bond record by a Malaysian company of RM12 billion by telecommunications company Binariang GSM Sdn in 2007. -- Bloomberg
