Prasarana to sell RM1b Islamic bonds
Syarikat Prasarana Negara Bhd, a Malaysian public transport operator, said it completed the sale RM1 billion of Islamic bonds today to finance the extension of a light railway in Kuala Lumpur.
The state-owned company offered Shariah-compliant debt, or sukuk, maturing in seven and 15 years, which attracted orders totaling of as much as RM4 billion, Megat Khairulazhar Khairodin, Prasarana’s corporate finance head, said in an interview today. It sold RM600 million of 2020 securities to yield 3.78 per cent and RM400 million of 2028 notes at a coupon rate of 4.56 per cent, he said.
"We are selling the sukuk now because market conditions are right," Megat Khairulazhar said by phone. "Proceeds will be used for the light rail extension and other public transport expansion."
Prasarana is extending the overhead rail network as part of Prime Minister Datuk Seri Najib Razak’s plans to relieve traffic congestion in Malaysia’s capital. DanaInfra Nasional Bhd, an arm of the country’s finance ministry, last week sold RM2.2 billion of sukuk to help fund construction of an subway in and around Kuala Lumpur.
The company last tapped the market in August by selling RM1 billion of sukuk or bonds that pay returns from assets to comply with Islam’s ban on interest. The 15-year notes were sold at a coupon rate of 4.58 per cent and last traded at 4.53 per cent on October 8, according to Bursa Malaysia prices.
Sales of Shariah-compliant notes from Malaysian companies dropped 64 per cent this year to RM30.4 billion from a year earlier, after reaching a record RM95.8 billion in 2012, data compiled by Bloomberg show. The Bloomberg-AIBIM Bursa Malaysia Corporate Index, which tracks a basket of local-currency sukuk, has increased 2.3 per cent to 104.5715 in 2013.-- Bloomberg