KUALA LUMPUR: MNRB Holdings Bhd's (MNRB) subsidiary, Malaysian Reinsurance Bhd (Malaysian Re) has issued a RM50 million bond under its RM250 million subordinated medium term note (MTN) programme.
The issuance was fully subscribed by MNRB.
Earlier in September 2013, Malaysian Re established a dubordinated MTN programme for the issuance of up to RM250 million, of which the first issuance of RM1.0 million was made by Malaysian Re on September 1, 2015.
MNRB said the RM50 million represented a drawdown from the programme.
Proceeds from the issuance will be used to strengthen its capital in view of the substantial growth of its gross premium during the last nine months.
"The stronger capital will also support Malaysian Re's business remodelling plan, a strategic transformation programme to transform its business portfolio over the next few years.
"As Malaysian Re has accelerated some of the initiatives under its remodelling plan, the company is undertaking a proactive measure to ensure adequate capital to support the acceleration," it said.
President and group chief executive officer Zaharudin Daud said MNRB fully supporte Malaysian Re's efforts in strengthening its business growth and expansion plans.
Zaharudin said the remodelling plan was in line with the company's transformation journey, and MNRB believed that the effort would further contribute to its profitability.
"The added capital from this issuance will enable Malaysian Re to push further into profitable lines and territories, rebalance its underwriting portfolio and enjoy the diversification benefits from remodelling the portfolio," he said.
The subordinated MTN qualifies as a Tier 2 capital instrument in compliance with the requirements of the risk-based capital framework for insurers issued by Bank Negara Malaysia.