Agrobank announced that it has successfully priced its inaugural RM500 million Sukuk Wakalah Programme based on the Islamic principle of Wakalah Bi Al-Istithmar.
After successful lodgment of the RM1 billion Sukuk Wakalah Programme with the Securities Commission Malaysia in August, the Bank has proceeded with its maiden foray into the capital markets. Commenting on the issuance of its RM500 million Sukuk offering, Khadijah Iskandar, CEO said, “We are extremely proud to have successfully priced our inaugural RM500 million of Sukuk Wakalah, upon completion of a one-day book-building exercise, which demonstrates the depth of the Malaysian Sukuk Capital market.”
“It is our privilege to be part of this innovative instrument which we believe will further enhance Malaysia’s position as a global Islamic financial hub and solidify its position as a leader in the global Islamic capital markets,” she added.
“The strong demand for this instrument in the market is a testimony of the confidence investors have in Agrobank’s credit, operations and business activities. The issuance will enable the industry to realise the benefits from raising capital through the issuance of these instruments as a cost-efficient and non-dilutive capital raising solution that lowers the cost of capital.”
The proceeds from the Sukuk Wakalah issuance shall be utilised for its shariah-compliant general business and working capital requirements.
Agrobank put forth a dual-tranche debut offering to the market on a five and seven-year Sukuk which landed at a very tight spread of 51 bps and 49 bps respectively. The book was closed at very competitive levels of 3.63% p.a for the five-year Sukuk and 3.90% p.a for the seven-year Sukuk, amidst a challenging market environment. This was achieved after price tightening of between four to six basis points across the tenures from the initial price guidance.
The inaugural issuance saw strong orders from quality investors comprising government agencies, financial institutions, asset management companies and insurance companies which resulted in an oversubscription of the amount offered.
Sukuk Wakalah Programme has been assigned a rating of AAA by Malaysian Rating Corporation Berhad. Maybank Investment Bank Berhad is the Principal Arranger, Lead Arranger and Lead Manager for the Sukuk Programme
Readers can catch more highlights of Agrobank’s progress and 2022 plans in BusinessToday’s exclusive interview with Khadijah in our upcoming issue.
