RM300m Subordinated Sukuk From Bank Muamalat Gets Overwhelming Response

The sukuk is the third series issuance under Bank Muamalat’s established RM1 billion 20-year Subordinated Sukuk Murabahah Programme (2016/2036)

RM300m Subordinated Sukuk From Bank Muamalat Gets Overwhelming Response


KUALA LUMPUR, July 8 -- Bank Muamalat Malaysia Bhd’s RM300 million Subordinated Sukuk Murabahah received overwhelming response from a diversified and wider range of investors during its book-building exercise recently.

The sukuk is the third series issuance under Bank Muamalat’s established RM1 billion 20-year Subordinated Sukuk Murabahah Programme (2016/2036), which qualified as Tier-2 capital  under  the  Bank Negara Malaysia’s Policy Document  on Capital Adequacy Framework for Islamic Banks Capital Components (CAFIB).

Bank Muamalat President and Chief Executive Officer, Khairul Kamarudin says the positive interest in the Subordinated Sukuk Murabahah Programme reflects the market’s confidence in the Bank’s strong fundamentals and strategic direction.

The sukuk, which will be issued on 20 July 2022, was competitively priced at 5.33% during the book-building exercise recently. The book managed to register a high bid-to-cover (BTC) of 2.31 times before it settled at 1.85 times over the proposed issue size with inclusion of unexpected new investors during the day.

The joint lead managers received diversified orders from various types of investors including financial institutions, asset management companies, government agencies, insurance companies and also high net worth investors.

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Sukuk proceeds

“The proceeds raised from the Subordinated Sukuk Murabahah will be utilised for our Islamic banking activities and working capital requirements, thus putting the Bank on a stronger footing for its continued growth” adds Khairul.

Bank Muamalat is the principal adviser, lead arranger and lead manager together with OCBC Al-Amin Bank Berhad for the Subordinated Sukuk Murabahah Programme. Other joint lead managers include, Bank Islam Malaysia Berhad, Maybank Investment Bank Berhad and RHB Investment Bank Bhd.

On a separate note, Khairul also mentioned that recently MARC Ratings has upgraded Bank Muamalat’s financial institution ratings to A+/MARC-1 and concurrently upgraded its rating on the Bank’s Islamic Senior Notes Programme (Senior Sukuk) of up to RM2 billion to A+IS, with stable outlook.

The ratings upgrade is premised on Bank Muamalat’s continued improvement in its financial performance, particularly its asset quality and profitability metrics which are in line with its peers in the same rating band. The Bank has maintained its financing growth trend since 2018. The improved credit metrics were also achieved on the back of healthy capitalisation levels.