KUALA LUMPUR: MBSB Bank Bhd has successfully priced its inaugural RM300 million sukuk offering under its dedicated RM5 billion sustainability sukuk Wakalah programme.
The offering was priced on April 4 amid the volatile market conditions and selling pressures seen on the domestic government securities in response to the rising global yield.
Still, the offering received overwhelming demand from diversified investors ranging from institutional investors, insurance and takaful companies to fund and asset management companies, financial institutions and high net worth investors with a final order book received amounting to RM2.9 billion, giving the transaction a strong bid to cover ratio of 10 times.
MBSB Bank acting chief executive officer Datuk Nor Azam M Taib said the offering marked the bank's first ever sustainability sukuk issuance in the domestic capital markets.
This demonstrated MBSB Bank's strong commitment towards supporting the government's sustainability agenda and initiatives.
"We are indeed very pleased with investors' strong response and the outcome of the transaction. We would like to express our sincere gratitude to the UK Government's Asean Low Carbon Energy Programme (LCEP) for the support towards the development of MBSB Bank's sustainability sukuk framework. The programme promotes inclusive economic growth in Southeast Asia through increased green finance flows for low carbon energy and energy efficiency," he said in a statement today.
MBSB Bank said it would use the proceeds from the offering to finance its green and social related projects, in line with the bank's strategic plan to actively participate in renewable energy and essential services.
MBSB said interest from investors remained strong throughout the book-building process, allowing the sukuk pricing to be further tightened by 30 basis points (bps) across the tenures from the high end of the initial price guidance.
The dual-tranche offering - RM200 million five-year tranche and a RM100 million seven-year tranche - were finally priced at Malaysian Government Securities +95 bps or a final yield of 4.36 per cent per annum and 4.73 per cent per annum respectively.
Maybank Investment Bank Bhd is the sole lead manager and bookrunner for this transaction as well as the sole principal adviser, sole lead arranger and sole sustainability structuring advisor for the sukuk programme.