KUALA LUMPUR: Agrobank successfully priced its inaugural RM500mil Sukuk Wakalah programme based on the Islamic principle of Wakalah Bi Al-Istithmar on Oct 18.
In a statement on Wednesday, it said after the successful lodgment of the RM1bil Sukuk Wakalah programme with the Securities Commission in August this year, the bank went ahead with its maiden foray into the capital markets where it received resounding support from the market.
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% per annum for the five-year Sukuk and 3.90% per annum 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,” Agrobank said.
Commenting on the successful issuance of its RM500mil Sukuk offering, the covering president/ chief executive officer of Agrobank, Khadijah Iskandar, said:
“We are extremely proud to have successfully priced our inaugural RM500mil of Sukuk Wakalah on Oct 18, 2021, 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.
Khadijah pointed out 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,” she added.
The proceeds from the Sukuk Wakalah issuance shall be utilised for its shariah – compliant general business and working capital requirements.
The Sukuk Wakalah programme has been assigned a rating of AAA by Malaysian Rating Corporation Bhd. Maybank Investment Bank Bhd is the principal arranger, lead arranger and lead manager for the Sukuk programme.