IJM Group Inks RM360.0m Sukuk Murabahah Subscription With CIMB

CIMB acted as the Sole Lead Arranger, Sole Lead Manager and Sole Shariah Adviser for the Sukuk Murabahah Programme, which will also be fully subscribed by CIMB.

IJM Group Inks RM360.0m Sukuk Murabahah Subscription With CIMB

Kuala Lumpur, 18 July 2022 – IJM Corporation Berhad, via its wholly-owned subsidiary, Fairview Valley Sdn Bhd, have today entered into a subscription agreement with CIMB Investment Bank Bhd and CIMB Islamic Bank for its proposed inaugural RM360.0 million nominal value Sukuk Murabahah to be issued under an Islamic Medium Term Notes Programme based on the Shariah-principle of Murabahah (via Tawarruq arrangement).

CIMB acted as the Sole Lead Arranger, Sole Lead Manager and Sole Shariah Adviser for the Sukuk Murabahah Programme, which will also be fully subscribed by CIMB.

In addition to being Fairview Valley’s inaugural Sukuk Murabahah issuance, the transaction incorporates sustainability-linked features with pre-agreed targets. The transaction’s terms include features such as energy and water efficiency performance indicators and renewable energy composition of the assets.

Profit rebates will be granted should Fairview Valley achieve these targets, thus lowering the overall cost of financing whilst also advancing sustainability practices.

The execution of the subscription agreement took place at a signing ceremony held at Menara CIMB. Signing the agreement on behalf of IJM and Fairview Valley was Lee Chun Fai, Deputy Chief Executive Officer & Deputy Managing Director of IJM, while CIMB was represented by Lo Nyen Khing, Group Head, Corporate Banking of CIMB Group and Nor Masliza Sulaiman, Deputy Chief Executive Officer of CIMB Investment Bank Bhd.

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Proceeds from the Sukuk

Proceeds from the inaugural Sukuk Murabahah issuance will be utilised to refinance the existing facilities of Fairview Valley that was used to fund the construction of Menara Prudential, a 27-storey Grade-A, LEED Gold-certified, MSC Status office tower.

This iconic building, located at the Tun Razak Exchange, Kuala Lumpur uses smart and sustainable building designs with Artificial Intelligence in its facilities management to optimise energy consumption for lighting and temperature performance. It also has a 360° LED display that wraps around the building - a first of its kind in Malaysia.

“We are proud for Menara Prudential to be funded with a facility which incorporates sustainability-linked features and we could not have found a better partner than in CIMB. This marks a first, but significant step for IJM in aligning our financing strategy with our sustainability agenda.

“The integration of our sustainability performance with financing metrics is also in line with our efforts to pursue green credentials under IJM’s Sustainability Roadmap FY2023-FY2025. We would like to commend CIMB for championing the green agenda and helping to realise IJM’s sustainability ambitions,” says Mr Lee Chun Fai.

Dato’ Abdul Rahman says, “We are pleased to partner with IJM in meeting their financing needs for Menara Prudential, a world-class green building. This transaction not only demonstrates IJM’s commitment to sustainability, but also CIMB’s commitment to advancing Islamic and sustainable finance, aligned with the practices of value-based intermediation.

Strategic plan

“It also marks the latest milestone towards CIMB Group’s aim of mobilising RM30 billion in sustainable finance by 2024 under our Forward23+ strategic plan. CIMB is honoured to play the sole lead role in this transaction with IJM and to be a part of IJM’s sustainability journey. We would like to take this opportunity to thank IJM in partnering with CIMB and wish them every success in their strategic growth plans.”

CIMB Group has been playing an active role in driving the growth of Islamic and sustainable finance. Since launching its sustainability linked financing offering in 2020, over RM1.2 billion worth of the offering has been accepted by regional corporate clients.

The Group has also executed landmark transactions in this space. Most recently, In June 2022, CIMB Islamic Bank Berhad entered into an RM1.0 billion landmark Sustainable Collateralised Commodity Murabahah transaction with Standard Chartered Saadiq Malaysia.

In January 2022, CIMB Bank Berhad also successfully issued its USD500 million RegS/144A Sustainable Development Goals Bond (“SDG Bond”), marking the first ever RegS/144A SDG Bond to be issued by a Malaysian bank in the international capital markets.