Prasarana prices its RM2b govt sukuk

by **hlk** Wed 27 Jul 2011, 19:12

Syarikat Prasarana Negara Bhd has successfully priced its RM2 billion 10-year and 15-year Islamic Medium Term Notes or sukuk issued yesterday, under its RM4 billion nominal value Sukuk programme guaranteed by the Malaysian government.

Arranged in 2009, the Sukuk programme is mainly to part finance the Kelana Jaya and Ampang LRT Line Extension Project (LEP) and other infrastructure improvement initiatives by Prasarana.

CIMB Investment Bank Bhd and Maybank Investment Bank Berhad are the joint lead arrangers and joint lead managers for the Sukuk issue. Additionally, Bank Islam Malaysia Bhd is the co-manager.

The Sukuk carries a semi-annual profit rate of 4.15 per cent per annum for the RM800 million 10-year tranche and 4.35 per cent per annum for the RM1.2 billion 15-year tranche.

Offered through a book-building process, the initial orders received when books opened reached RM8.95 billion.

It grew to a high of RM15.23 billion during a two-day book-building period, which closed yesterday and represented a bid-to-cover ratio of 7.51 times on the deal size of RM2 billion.

Due to the overwhelming response from investors, the Sukuk was priced at the tightest end of the final price guidance which demonstrates strong investor appetite and ample liquidity in the market for high grade papers, reflected primarily by the strength of the government guarantee for it.

Historically, Prasarana has issued Sukuk that commanded good pricing.

A broad range of investors participated in the offering, including government agencies, financial institutions, fund managers, insurance companies, corporate accounts and offshore investors.

"Prasarana is very pleased with this successful outcome and would like to thank the Ministry of Finance, CIMB and Maybank Investment as joint lead managers and joint book runners.

"Our appreciation also to BIMB as co-manager and all parties who participated in this transaction for their efforts in coordinating a well-executed issuance strategy," said Shahril Mokhtar, Group Managing Director of Prasarana. - Bernama