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Wednesday August 4, 2010

Khazanah issues single largest sukuk of S$1.5bil

PETALING JAYA: Khazanah Nasional Bhd has issued a 5-year and a 10-year sukuk for S$1.5bil (RM3.6bil) – its single largest sukuk issuance to-date.

In a late statement issued yesterday night, the country’ sovereign wealth fund said the Khazanah Singapore dollar sukuk, issued at nominal value, was priced through an accelerated book building process on Aug 3 and at the tightest end of the price guidance at 2.615% and 3.725% for the 5-year and 10-year sukuk, respectively.

The issuance is also the largest and longest termed sukuk issuance in Singapore, the largest Singapore dollar issuance by a foreign issuer in Singapore and the first Singapore dollar sukuk issuance out of the Malaysia International Islamic Financial Centre (MIFC) initiative, it said.

According to the statement, the transaction drew a demand of 4.3 times book size, enabling Khazanah to upsize the transaction from the initial offer size of S$1bil to S$1.5bil.

The deal attracted a diverse group of 78 local and international investors comprising financial institutions, asset management firms, statutory bodies and insurance companies from Singapore, Malaysia, Hong Kong, Brunei and Europe, it said.

This issue via a Malaysian-incorporated special purpose vehicle, Danga Capital Bhd, encompass a S$600mil 5-year sukuk and a S$900mil 10-year sukuk which was launched on an initial offer size of S$1bil with a “green shoe option” (an option to upsize).

Tan Sri Dr Zeti Akhtar Aziz, governor of Bank Negara and chairman of MIFC executive committee, said via the statement: “This is a further step forward for our MIFC initiative to evolve Malaysia into a multi- currency issuance platform for sukuk.”

The MIFC initiative promotes Malaysia as an Islamic finance global hub.

Ong Chong Tee, deputy managing director of the Monetary Authority of Singapore, said: “This latest sukuk adds to the growing range of syariah-compliant financing in Singapore.

“We welcome regional participants to tap into our growing capital markets and to continue to add to the depth and diversity of markets in the region.”

Khazanah managing director Tan Sri Azman Mokhtar said: “We are very pleased that this transaction broadens further our active participation in international Islamic capital markets.

“The transaction was executed with speed, at a competitive price while the substantial over-subscription was particularly encouraging.”

CIMB, DBS and OCBC are the joint bookrunners for this offering.

The three are also the joint lead managers together with CIMB Islamic, the Islamic Bank of Asia and OCBC Al-Amin.

The co-managers are the Australia and New Zealand Banking Group Ltd, BNP Paribas, Malayan Banking Bhd and United Overseas Bank Ltd.

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