KUALA LUMPUR: Agrobank says it has priced its inaugural dual-trache RM500 million Sukuk Wakalah at "very competitive levels".
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 basis points (bps) and 49 bps respectively.
"The book was closed at very competitive levels of 3.63 per cent per annum for the five-year sukuk and 3.90 per cent per annum for the seven-year tranche," the bank said in a statement today.
The RM500 million is part of Agrobank's RM1 billion sukuk Wakalah lodged witn the Securities Commission in August this year.
Agrobank covering president and chief executive officer Khadijah Iskandar said the strong demand for the instrument in the market was a testimony of the confidence investors had in the bank's credit, operations and business activities.
"We are extremely proud to have successfully priced our inaugural RM500 million of Sukuk Wakalah on October 18 2021, upon completion of a one-day book-building exercise, which demonstrates the depth of the Malaysian sukuk capital market.
"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 said in the statement .
Agrobank said the proceeds from the sukuk would used for its Shariah-compliant general business and working capital requirements.
The bank said the inaugural issuance had seen 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.
The sukuk 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 issuance.