KUALA LUMPUR: UOB Malaysia has established its inaugural RM5bil Islamic debt programme, under the Shariah principle of Wakalah Bi Al-Istithmar and the successful pricing of its debut RM500mil Basel III-compliant Tier 2 subordinated Islamic medium term notes (Tier 2 Sukuk Wakalah).
In a statement, the bank said the Islamic debt offering received an overwhelming response from the market and was oversubscribed by about 3.39 times.
The final order book of RM1.7bil enabled UOB Malaysia to close at fixed profit rate of 4.01% per annum.
At 45 basis points above the benchmark Malaysian Government Securities (MGS), this was the tightest spread ever recorded for a Tier 2 capital instrument in the Ringgit-denominated market to-date, it said.
“We are pleased that our first Sukuk offering was very well received by the market. The oversubscription and the tight pricing achieved reflect investors’ confidence in UOB Malaysia’s solid financial position.
"The strong demand is also a testament to the liquidity in the local debt capital market and its robustness in supporting local corporates’ financing needs," said UOB Malaysia CEO Ng Wei Wei.
The Tier 2 Sukuk Wakalah received a AA1 rating by RAM Rating Services Bhd.
