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Wednesday February 2, 2011

Strong demand for PBLT maiden sukuk issue

PETALING JAYA: Pembinaan BLT Sdn Bhd’s (PBLT) issuance of its first series of Islamic medium term notes (IMTN) was successfully priced amid strong demand from investors.

They were issued under its RM10bil nominal value of sukuk pursuant to the IMTN via Aman Sukuk Bhd, a wholly-owned subsidiary of PBLT.

The company said in a statement that the first series of the sukuk carried a semi-annual profit rate of 3.73% per annum for the three-year tranche, 4.05% per annum for the five-year tranche, 4.23% per annum for the seven-year tranche, 4.55% per annum for the 10-year tranche, 4.75% per annum for the 12-year tranche and 5.05% per annum for the 15-year tranche.

The sukuk was offered via a book-building process and the initial orders received reached RM3.5bil on the first day of trading and grew to RM4.36bil during the two-day book-building period which represented a bid-to-cover ratio of 4.36 times on the initial deal size of RM1bil, the statement said.

The company said due to an overwhelming investors’ response the deal was upsized to RM1.1bil.

“The deal was priced within the range of the final price guidance, after being revised lower from the initial price guidance, demonstrating strong investor appetite and ample liquidity in the market for high-grade papers,” it said in a statement yesterday.

It added that a broad range of investors participated in the offering including government agencies, financial institutions, fund managers, insurance companies and corporate accounts.

“We are happy with the success of the sukuk issuance and appreciate the full support and cooperation from the Finance Ministry, Home Ministry, CIMB Investment Bank Bhd, Maybank Investment Bank Bhd, RHB Investment Bank Bhd, AmInvestment Bank Bhd, Bank Islam Malaysia Bhd and Prokhas Sdn Bhd,” said PBLT managing director and chief executive officer Mohammed Redza Mohd Yusof.

PBLT is expected to use income from sub-lease rental payments to redeem Aman Sukuk IMTN.

MARC had assigned a final credit rating of AAAIS to Aman’s IMTN Programme, with stable outlook.

The proceeds raised from the issuance of the IMTN would be used by PBLT to finance development, pay fo operational expenses and financing costs as well as to refinance short term financing.

CIMB is the principal adviser and lead arranger for the IMTN programme, while the joint lead managers were AmInvestment Bank Bhd, Bank Islam, CIMB, Maybank Investment Bank Bhd and RHB Investment Bank Bhd.

Bank Islam, the syariah adviser for the IMTN programme and Prokhas Sdn Bhd the consultant to PBLT.

PBLT Sdn Bhd is the sole developer of police quarters and facilities in the country.

It was set up by the Government in response to the report of the Royal Commission to enhance the operation and management of the Royal Malaysian Police.

“We are honoured to play a role in supporting the government’s effort to promote private finance initiatives.

In addition, the successful issuance of Aman Sukuk signifies the investors’ confidence in the Sukuk ringgit market thus boosting the country’s economic activity,” Redza said.

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