KUALA LUMPUR: Bank Islam Malaysia Bhd has issued its fourth tranche of RM300 million subordinated sukuk murabahah.
The amount was raised under Bank Islam's RM10 billion sukuk murabahah programme on November 12 this year.
"The sukuk murabahah programme of RM10.0 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," it said.
Bank Islam said the subordinated sukuk murabahah issued under the sukuk murabahah programme shall qualify as Tier 2 regulatory capital of Bank Islam 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," it said.
Bank Islam said under the sukuk murabahah programme, it was given the flexibility to issue subordinated sukuk murabahah and senior sukuk murabahah during the availability period of the sukuk murabahah programme.
"RAM Rating Services Bhd has assigned 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.
"Bank Islam is also the principal adviser, lead arranger, lead manager and Shariah adviser for the sukuk murabahah programme," it said.
Bank Islam group chief executive officer Mohd Muazzam Mohamed said the sukuk's response had been positive, with orders being 2.32 times more than the issuance with a final pricing of 4.10 per cent.
"The overwhelming demand from investors is an indication of the confidence the capital market has in BIMB and our long-term business sustainability," he said.
Muazzam said proceeds from the issuance woud ensure the Bank Islam was 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.
"We thank investors for their trust and confidence in Bank Islam Group as we move to an exciting future and catalyse the growth of the islamic banking industry," he added.