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Sarawak energy issues inaugural RM3 bln sukuk

Posted on June 25, 2011, Saturday

KUALA LUMPUR: Sarawak Energy Bhd (Sarawak Energy) has issued sukuk (Islamic bonds) totalling RM3 billion, the first of SEB’s RM15 billion ‘Sukuk Musyarakah Programme’.

With a size of RM500 million, the first tranche carries a maturity of five years with a profit rate of 4.4 per cent per annum, while the second tranche of RM700 million is at 4.7 per cent per annum for seven years.

The remaining tranches comprising longer-dated maturities were priced at 5.15 per cent per annum for 10 years (RM1 billion) and 5.65 per cent per annum for 15 years (RM800 million).

The proceeds from the sukuk would be used by SEB to finance the group’s capital expenditure requirements as well as to refinance certain existing borrowings, according to a statement from RHB Investment Bank Bhd, the sole principal adviser and lead arranger for the sukuk programme.

“It’s significant to note that the sukuk programme with an overall limit of RM15 billion represents the single largest debt programme ever established by a power utility company in the domestic market,” said Mike Chan, officer-in-charge of RHB Investment Bank.

He said that it was designed to cater to the funding requirements of SEB from now until 2016.

“The good demand of the issue is clearly a reflection of SEB’s high credit standing among investors.

It’s also the single biggest issue by a power utility company so far this year,” said Chan.

The sukuk musyarakah programme has been accorded a long-term rating of AA1 by RAM Rating Services Bhd. — Bernama

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