RIYADH — Kenanga Investment Bank (KIBB) and its Saudi partner Wasatah Capital have identified an opportunity for Saudi companies to create a presence in the Malaysian sukuk market following Al Bayan Group Holding Company’s 200-million Malaysian ringgit (MR) sukuk issuance.
The RM200-million sukuk issuance is the first tranche out of an inaugural RM1.0 billion Sukuk Wakalah Program. It is also the first Malaysian Ringgit Sukuk Program to be established and issued by a Saudi corporate issuer to date in Malaysia.
Kenanga Investment Bank, in collaboration with Wasatah Capital, has acted as a joint lead manager on Al Bayan’s sukuk issuance and was made via Al Bayan’s special-purpose vehicle incorporated in Malaysia, ABHC Sukuk Berhad.
Proceeds from the sukuk issuance, with tenure of three years, will be used by the Group primarily for repayment of existing debt obligations and expanding its core businesses as well as working capital requirements.
The Sukuk Program has been assigned a long-term rating of AA3(s) by RAM Rating Services Bhd. Under a kafalah agreement in favor of ABHC Sukuk Berhad, Al Bayan shall provide an irrevocable and unconditional guarantee to the holders of the sukuk. As such, the rating is based on the credit profile of the Group.
Chay Wai Leong, Managing Director of KIBB, said: “Al Bayan’s issuance of sukuk in the local bond market further testifies to the growing interest from foreign issuers toward Malaysia’s mature sukuk framework and financial environment.
“We can expect to see more contributions from foreign issuers to the growth and diversity of our Islamic capital markets. We will continue to work with our partner, Wasatah Capital based in Saudi Arabia, in bringing Saudi-based issuers to Malaysia.”
Abdullah Al Rasheed, Chief Executive Officer of Wasatah Capital, said: “We believe that the success of the Al Bayan’s sukuk should encourage more Saudi companies to seriously consider this funding source. We also believe that the presence of Kenanga Investment Bank in Malaysia and Wasatah Capital in Saudi Arabia brings a unique value proposition to Saudi companies interested in attracting Malaysian investors” — SG