IJN to raise RM209mil via Sukuk issue


INSTITUT Jantung Negara Sdn Bhd (IJN) is targeting local investors to raise RM209mil through its issuance of Sukuk or Islamic trust certificates. 

The issuance, under a Sukuk Musyarakah programme, is to finance the expansion of the National Heart Institute, scheduled for completion in 2008. 

IJN, which is 99.9%-owned by Ministry of Finance Inc and operates the institute, will issue this Sukuk via a special purpose vehicle company, IJN Capital Sdn Bhd, based on the Islamic principle of Musyarakah. 

Chief executive officer Mohd Radzif Mohd Yunus said IJN was in final discussions with interested parties on the Sukuk yield, expected to be known, early next month. 

“It will be pegged against the market as far as possible,” he told reporters in Putrajaya after the signing of the issuance agreement between IJN Capital and RHB Sakura Merchant Bankers Bhd yesterday, witnessed by Finance Ministry’s special advisor Datuk Siti Hadzar Mohd Ismail. 

Picture shows Finance Ministry’s special advisor Datuk Siti Hadzar Mohd Ismail (centre) witnessing the exchanging of documents between RHB Sakura chairman Abdullah Mat Noh (left) and IJN chairman Tan Sri Mohamed Khatib Abdul Hami (right). - Starpic by Joel Chan

Radzif said depending on discussions, IJN would consider using the yield from a recent RM2bil issuance of Islamic residential mortgage-backed Sukuk Musyarakah (IRMBS) as a benchmark, aside from Bank Negara rates. 

On Thursday, Cagamas Bhd’s wholly-owned subsidiary Cagamas MBS Sdn Bhd had issued the IRMBS, which attracted a book size of RM13.5bil from investors. 

Malaysian Rating Corp Bhd has accorded IJN’s Sukuk with maturities of seven years or less rating of AAA, while those with maturities of more than seven years are rated AA+.  

The RM209mil will be used to finance the refurbishment of existing facilities in the hospital and construct a new block, with its first portion to be ready in the first quarter of 2007. 

Of the total amount, 70% will be used for building works, while the rest is allocated for purchase of medical and non-medical equipment. 

Total beds will be increased to 420 from the current 270 under the expansion to cater to 110,000 patients treated yearly. 

The Government funds about 85% of its patients, ranging from civil servants and their dependents, government pensioners and underprivileged patients.  

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