KUALA LUMPUR: SME Bank's maiden sustainability sukuk Wakalah has been oversubscribed under its book building exercise, registering a final order of RM1.78 billion.
This translated into 3.56 times bid-to-cover from the target issuance of RM500 million on July 21, said SME Bank in a statement on Saturday.
SME Bank group president and chief executive officer Aria Putera Ismail said with the issuance of the sustainability sukuk, the bank would now be able to offer more innovative financing solutions for small and medium enterprises.
"Taking into account of the challenging market situation, the bank managed to price the issuance at a very competitive profit rate of 3.1 per cent. Interestingly, this sustainability sukuk has received an overwhelming demand not only from domestic institutional investors, but also from foreign asset managers.
"The investors' profile is quite diversified and well supported by financial institutions, fund management companies, insurance companies and government linked companies."
Aria Putera added that the high demand was also driven by awareness movements within and outside the country that continue to support a balanced and sustainable development.
SME Bank said the sukuk Wakalah programme was made up of Islamic medium term notes programmes of up to RM3 billion, which includes the sustainability sukuk and Islamic commercial papers programme of up to RM1 billion.
This first non-government guarantee sukuk Wakalah programme for SME Bank has been accorded AAA ratings by Malaysian Rating Corporation Bhd and also Gold standard for the rating agency's sustainability sukuk framework, its highest rating.