M’sia mulls 1st global bond sale in 2 years


Malaysia is considering offering a global bond for the first time in two years after Prime Minister Tun Dr Mahathir Mohamad (picture) pared the country’s economic growth target and abandoned a plan to balance its budget by 2020.

The government is asking banks to submit proposals for a US dollar or yen bond, said people familiar with the matter who asked not to be identified as the information is private.

The bonds could be conventional or Islamic, said the people, adding that the size and tenure of the offering weren’t given.

This debt offering would be the first for Dr Mahathir’s government since it took power in May. He is targeting an annual economic growth of 4.5% to 5.5% in 2018 to 2020, lower than the previous administration, according to the government’s recent midterm review.

The budget deficit, which was to be balanced in two years, is now estimated to widen to 3% of GDP.

Fitch Ratings, S&P Global Ratings and Moody’s Investors Service all rate Malaysia at the fourth-lowest investment grade, or in the single A zone.

The cost of insuring the nation’s debt from default for five years has risen 54 basis points this year to 112, its highest since June, CBIN prices show.

State-owned utility Tenaga Nasional Bhd last week sold US$750 million (RM3.13 billion) of dollar Islamic securities.