Subordinated sukuk murabahah is worth RM300 mil
Bank Islam Malaysia Berhad (“BIMB”) has successfully issued its fourth tranche of RM300 million Subordinated Sukuk Murabahah (“Sukuk”) under its RM10 billion Sukuk Murabahah Programme on Nov 12, 2021.
The Sukuk Murabahah Programme of RM10 billion is the second Sukuk programme established by the bank. The programme issued its first tranche of RM300 million in November 2018, the second tranche of RM400 million in March 2020, followed by the third tranche of RM700 million in October 2020.
The Sukuk shall qualify as Tier 2 regulatory capital of BIMB in compliance with Bank Negara Malaysia’s Capital Adequacy Framework for Islamic Banks (“Capital Components”). Hence, it will enhance the capital adequacy of BIMB in line with the Basel III requirements. The Sukuk, which will be redeemed at its full nominal value upon maturity, comes with a call option on its fifth anniversary and is rated A1/Stable by RAM Rating Services Berhad.
BIMB lodged the Sukuk Murabahah Programme with the Securities Commission Malaysia (“SC”) on Sept 6, 2018. Under the programme, the bank has the flexibility to issue Subordinated Sukuk Murabahah and/or Senior Sukuk Murabahah during the availability period of the Sukuk Murabahah Programme.
RAM Rating Services Berhad has reaffirmed a final long-term rating of A1/Stable and AA3/Stable to the Subordinated Sukuk Murabahah and Senior Sukuk Murabahah, respectively, under the Sukuk Murabahah Programme.
BIMB is also the Principal Adviser, Lead Arranger, Lead Manager and Shariah Adviser for the Sukuk Murabahah Programme.
BIMB Group Chief Executive Officer Mohd Muazzam Mohamed said the response has been positive, with orders being 2.32 times more than the issuance, with final pricing of 4.10 per cent.
“The overwhelming demand from investors indicates the confidence the capital market has in BIMB and our long-term business sustainability,” said Mohd Muazzam.
“Proceeds from the issuance will ensure BIMB is adequately capitalised beyond the minimum regulatory capital requirements. The measure will further fortify our efforts to provide value to our customers as we embark on a new chapter for BIMB as a pure-play full-fledged Islamic Bank listed in Bursa Malaysia.”