BANK Muamalat Malaysia Bhd’s RM300 million Subordinated Sukuk Murabahah garnered overwhelming response from a diversified and wider range of investors during its book-building exercise recently.

The RM300 million Subordinated Sukuk Murabahah is the third series issuance under the bank’s RM1 billion 20-year Subordinated Sukuk Murabahah Programme (2016/2036), which qualified as Tier-2 capital under the Bank Negara Malaysia’s Policy Document on Capital Adequacy Framework for Islamic Banks Capital Components.

The RM300 million Subordinated Sukuk Murabahah, to be issued on July 20, 2022, was competitively priced at 5.33% during the book-building exercise recently. 

The book managed to register a high bid-to-cover of 2.31 times before it settled at 1.85 times over the proposed issue size with inclusion of unexpected new investors during the day.

Bank Muamalat president and CEO Khairul Kamarudin said in a statement today that the positive interest in the Subordinated Sukuk Murabahah Programme reflects the market’s confidence in the bank’s strong fundamentals and strategic direction.

“The proceeds raised from the Subordinated Sukuk Murabahah will be utilised for our Islamic banking activities and working capital requirements, thus putting the bank on a stronger footing for its continued growth,” Khairul said in a statement today.

Bank Muamalat is the principal adviser, lead arranger and lead manager together with OCBC Al-Amin Bank Bhd for the Subordinated Sukuk Murabahah Programme. Other joint lead managers include Bank Islam Malaysia Bhd, Maybank Investment Bank Bhd and RHB Investment Bank Bhd.

On a separate note, Khairul also mentioned that recently MARC Ratings Corp Bhd has upgraded Bank Muamalat’s financial institution ratings to A+/MARC-1 and concurrently upgraded its rating on the bank’s Islamic Senior Notes Programme (Senior Sukuk) of up to RM2 billion to A+IS, with stable outlook.

The ratings upgrade is premised on Bank Muamalat’s continued improvement in its financial performance, particularly its asset quality and profitability metrics which are in line with its peers in the same rating band.

The bank has maintained its financing growth trend since 2018. The improved credit metrics were also achieved on the back of healthy capitalisation levels. — TMR