KUALA LUMPUR: City developer SkyWorld Development Group successfully raised RM50 million through Tranche 1 of its Sukuk Musharakah IMTN Programme on December 8.
In a statement today, the company said it has established its first landmark RM1 billion financial programme comprising RM600 million Sukuk Musharakah IMTN Programme and a RM400 million Sukuk Murabahah ICP Programme through a special-purpose financial vehicle, SkyWorld Capital Bhd.
It said under the programme, SkyWorld and its group of companies will sell their beneficial interest under the respective development projects.
The future progress billings with regard to the relevant development projects will be used to fund the remaining construction costs as well as to meet the issuer’s fees, expenses and obligations under each facility.
SkyWorld founder and group managing director Datuk Ng Thien Phing said despite being a relatively young and emerging developer, SkyWorld is always on the lookout for innovative funding.
“This is the first structured transaction in Malaysia involving unbilled sales and the first to involve affordable housing. Globally, this is also the first Shariah-compliant securitisation of progress billings in the market, allowing SkyWorld to more efficiently manage project development cash flows.
“We are thankful for the support of all parties concerned and these events signalled a positive start for SkyWorld Development Group.
“With over 130 acres of quality land banks totalling more than RM13 billion in gross development value, we are on the right track of transforming the city and unlocking our land value,” he said.
SkyWorld said the first project to be securitised under this financing programme is the SkyAwani Residence project in Sentul and is rated AA3/Stable by RAM Rating Services Bhd.
The credit rating accorded to SkyAwani is a reflection of SkyWorld’s efficient management execution, strong performance capability, a high percentage of lock-in sales backed by end financing and historical track record of completing projects on time and well within budget with no incidence of any delays.
It said the RM50 million Tranche 1 IMTN is secured against 1,260 SPAs for its SkyAwani Residence project in Sentul, Kuala Lumpur whilst the unrated Tranche 1 ICP of up to RM41 million, which is meant to underwrite construction of SkyAwani development and liquidity risk of Tranche 1 is guaranteed by Danajamin Nasional Bhd and fully underwritten by Alliance Investment Bank Bhd.
SkyAwani is the group’s first affordable housing project under the Rumah Mampu Milik Wilayah Persekutuan (RUMAWIP) programme.
The Sukuk structure is developed, arranged and advised by NewParadigm Capital Markets Sdn Bhd, a corporate finance advisory firm licensed by the Securities Commission Malaysia.
NewParadigm has been working with SkyWorld’s Corporate Finance team on this innovative Islamic structure for the last 12 months.