Sime Darby Property’s RM4.5bil sukuk programme gets AA+IS rating


Notwithstanding the challenging operating environment, the rating reflects SDP’s position as a leading township developer.

PETALING JAYA: Sime Darby Property Bhd (SDP) has amended its RM4.5bil sukuk musharakah programme to incorporate terms for the potential issuance of Asean Sustainable and Responsible Investment (SRI) sukuk with a credit rating of AA+IS and a stable outlook accorded by Malaysian Rating Corp Bhd (MARC).

Notwithstanding the challenging operating environment, the rating reflects SDP’s position as a leading township developer with its sizeable landbank in key population growth areas, its steady sales performance with an overall take-up rate for ongoing projects of 65%, and an unbilled sales of RM1.54bil as at June 2020 reflecting a healthy market position.

The RM4.5bil sukuk musharakah programme was novated from Sime Darby Bhd as part of the restructuring exercise, with effect from Sept 29,2017, following which it became unrated.

The revisions to the principal terms and conditions of the sukuk musharakah programme will be submitted to the Securities Commission within 14 business days of the effective date of the revisions, prior to any issuance of sukuk musharakah under the sukuk musharakah programme.

MARC had also assigned a “gold” sustainability sukuk assessment to the company’s sustainability sukuk framework, which sets out the guidelines for any future issuance of Asean SRI sukuk musharakah under the RM4.5bil sukuk musharakah programme.

Echoing from the gold assessment, projects financed by the sukuk proceeds will help enhance SDP’s commitment towards building sustainable communities to meet the needs of the people and environment today without compromising the needs of tomorrow.

Maybank Investment Bank Bhd is the principal adviser and lead arranger for the sukuk musharakah programme.

The proceeds raised from the programme will be utilised to finance SDP and its subsidiaries’ future investments, capital expenditure and/or working capital requirements, as well as refinance the group’s debt.

In the event that the Asean SRI sukuk musharakah is issued, the proceeds raised will be utilised in accordance with the criteria set out in SDP’s sustainability sukuk framework, which sets out the use of the sustainable sukuk proceeds, the process of evaluating eligible projects, its commitment in management of proceeds, proceeds allocation, and impact reporting.

SDP has a firm sustainable profile attributed by its strong governance of sustainability functions and efficiency in measuring the progress of its sustainability journey, paving the way in implementing notable sustainable initiatives in its various townships.

This includes projects like urban farming that empowers the community, building multi-generational homes, as well as homes that are energy-efficient and solar-ready in townships blessed with various amenities and facilities that connect the people to nature and help them live a well-balance lifestyle.

SDP also collaborated with Tropical Rainforest Conservation & Research Centre (TRCRC) to set up the Elmina Rainforest Knowledge Centre (ERKC) in the City of Elmina which will be a centre of environmental education and conservation, research and development, promotion of eco-tourism and other green activities.

The ERKC is connected to the 1,093ha Subang Forest Reserve.

“We are pleased to be making headway in setting up the platform for the issuance of the Asean SRI sukuk, ” said Sime Darby Property Group managing director Datuk Azmir Merican.

“This development exemplifies our commitment to the company’s corporate sustainability model, which captures and delivers on the Three Ps – People, Planet and Prosperity.

“This would further motivate our actions towards contributing to a better society, optimising environmental performance and delivering sustainable development.”

SDP is the only Malaysian property developer to be recognised in the Dow Jones Sustainability Indices for two years, for its sustainability efforts which has spurred the company further in its sustainability journey and to set new benchmarks and be an example for the industry.

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Sime Darby Property , developer , township , sukuk , MARC , rating

   

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