Positive outlook in 2022 for sustainability sukuk

The sustainability issuances last year totalled RM8.4b which accounted for 7.6% of total sukuk issuances in Malaysia, says Maybank IB CEO 


THE pipeline of issuance of sustainability sukuk is coming close to RM3 billion as of February which signals growth in the market space. 

Maybank Investment Bank Bhd CEO Datuk Fad’l Mohamed said the sustain-ability issuances last year totalled RM8.4 billion which accounted for 7.6% of total sukuk issuances in Malaysia last year. 

“The outlook has been very good in terms of issuance of sustainability sukuk. If you look at data points for 2022, even in the first half we are seeing a strong pipeline, which is close to RM3 billion coming up to the market for potential issuances,” he said in a press conference during the signing of agreement between MBSB Bank Bhd and Maybank Investment Bank (Maybank IB) for MBSB’s inaugural RM5 billion sustainability sukuk wakalah programme in Petaling Jaya, Selangor yesterday. 

He said the total issuances for sustain-ability sukuk is expected to be more than RM8 billion this year, given the positive outlook to date. 

MBSB’s RM5 billion sustainability sukuk programme is its first sustainability sukuk platform. 

The sustainability sukuk wakalah programme will have a perpetual programme tenure and has been accorded a preliminary rating of A+IS by MARC Ratings Bhd. 

Proceeds raised from the programme will be utilised to finance and/or refinance, in part or in whole, future and existing eligible shariah-compliant financings, including the construction and development of eligible projects. 

Maybank IB is the sole principal adviser, sole lead arranger, sole lead manager and sole sustainability structuring adviser while Maybank Islamic is the shariah adviser for the programme. 

MBSB’s acting CEO Datuk Nor Azam M Taib said the programme is essential in placing the bank in the sustainability space and in line with the current banking industry theme. 

“It allows the bank to continue to grow our sustainable generating assets including lending to green projects, affordable housing, public health, education, small and medium-sized enterprises financing and the underserved segments. 

“The sustainability label attached to our sukuk offers diversification to investors as we acknowledge there is a growing demand of sustainability sukuk in the market and this enables the bank to have access to a larger pool of investors including those with dedicated environmental, social and governance (ESG) mandates,” he said. 

Fad’l said the transaction will create a multiplier effect when MBSB supports its customers who are involved in eligible green and social projects. 

“We look forward to bringing more of our sustainability-first ideation, in line with our priority of advancing ESG in the financial and capital markets,” he added. 

The sustainability sukuk wakalah programme is in compliance to the relevant sustainability frameworks such as the Securities Commission Malaysia’s Sustainability and Responsibility Investment Sukuk Framework, the Asean Capital Markets Forum’s Green, Social and Sustainability Bond Standards, and the International Capital Markets Association’s Green, Social and Sustainability Bond Principles.