KUALA LUMPUR: United Overseas Bank (M) Bhd (UOB Malaysia) has priced its RM750mil Basel III-compliant Tier 2 subordinated Islamic medium-term notes (Tier 2 Sukuk Wakalah) on June 19.
In a statement, the bank said the issuance is part of its RM5bil Sukuk Wakalah Programme, established in January 2024 under the Shariah principle of Wakalah Bi Al-Istithmar.
The Tier 2 Sukuk Wakalah, initially targeted at RM500mil, was upsized to RM750mil following strong demand from a diverse group of over 20 high-quality investors, including insurance companies, fund managers, government-linked investment entities, banks, and private banks.
UOB Malaysia said the Tier 2 Sukuk Wakalah was fixed at a profit rate of 3.85% per annum, representing a spread of 36 basis points above the seven-year benchmark Malaysian Government Securities (MGS).
The Sukuk is scheduled to be issued on July 3, 2025 and matures on July 3, 2037, with an optional redemption on July 2, 2032.
"We are pleased that the second tranche of our Sukuk Wakalah programme has been met with such strong investor interest, following the success of our debut issuance last year.
“The upsized issuance reflects continued confidence in UOB Malaysia’s credit strength and long-term strategic direction. It also reflects the depth and maturity of Malaysia’s Islamic debt capital market, which continues to attract a diverse and high-quality investor base. This outcome affirms both the resilience of Malaysia’s financial system and the enduring strength of the country’s strong economic fundamentals,” chief executive officer Ng Wei Wei said.
Rated AA1 by RAM Ratings, the Tier 2 Sukuk Wakalah qualifies as UOB Malaysia’s Tier 2 capital under Bank Negara Malaysia’s Capital Adequacy Framework for Islamic Banks.
UOB Malaysia and CIMB Investment Bank acted as the joint lead managers for this transaction.
