Against the backdrop of Malaysia's flourishing debt market - one that has been a viable source of financing for foreign issuers as well as the issuance of sukuk - RAM Ratings has had the distinction of having rated numerous landmark deals.
Several RAM-rated foreign issuers made their debut in the ringgit bond market in 2014, including the first European entity, i.e. Turkiye Finans Katilim Bankasi, with its RM3 billion Sukuk Murabahah MTN Programme (via financing conduit TF Varlik Kiralama A.S.). Another newcomer was CIMB Thai Bank Public Company Limited, with its RM2 billion Tier-2 Subordinated Debt Programme. "CIMB Thai is the first Thai entity to issue capital securities in Malaysia. RAM is pleased to play a part in this positive development in ASEAN cross-border funding - a key initiative of the ASEAN Economic Community," said Foo Su Yin, CEO of RAM Ratings.
RAM's dominance in rating sukuk transactions is also highlighted by its rating of Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad's USD500 million Multi-Currency Sukuk Wakalah Bi Al-Istithmar Programme - the world's first sukuk issued by a Japanese commercial bank. Another RAM-rated issuer of note is AmIslamic Bank Berhad, which issued the first Basel III-compliant sukuk in Malaysia, valued at RM3 billion.
Based on data from Bank Negara Malaysia (BNM), gross PDS issuance in Malaysia amounted to RM85.5 billion in 2014. This was 1.9% higher than the previous year's RM83.9 billion, despite higher financing costs following BNM decision to raise the Overnight Policy Rate by 25 bps in July 2014. Financial institutions (FIs) played a major role in boosting the domestic PDS market last year, accounting for 59% of total PDS issuance. There was significant capital raising by FIs, including Malayan Banking Berhad's up to RM10 billion Additional Tier-1 Capital Securities Programme - the first Basel III AT1 programme set up in Malaysia, as well as subordinated debt programmes established by several other FIs. 
Moving forward, we expect RM85 billion-RM95 billion of gross issuance in 2015, mainly supported by financing for infrastructure projects and further capital-raising efforts by FIs.
RAM's league tables for sukuk and conventional PDS in 2014 are dominated by Malaysia's 2 banking giants - Maybank Investment Bank (MIB) and CIMB Investment Bank (CIMB IB). MIB emerged in the top spot after having arranged close to RM25 billion or 33.6% of the RM74.4 billion of RAM-rated PDS and sukuk last year. Meanwhile, CIMB IB led the pack in terms of the largest number of PDS and sukuk issues arranged (13). Although MIB took pole position as the arranger with the highest value of sukuk deals - about RM14.5 billion (33.8% of the sukuk rated by RAM) - it shared the spotlight with CIMB IB in terms of the highest number of sukuk transactions arranged (7 each, representing 40% of all of RAM-rated sukuk issues). In the meantime, Hong Leong Investment Bank Berhad was the newcomer among the top 3 names in RAM's in league table on PDS and sukuk issues by programme value, after having arranged the RM10 billion Sub Bonds of its sister bank, Hong Leong Bank Berhad.
The RAM League Tables list lead managers by the value and number of deals for all RAM-rated bonds. Credit is given to the entire debt programme regardless of the type of instrument, as long as the debt had been issued during the period, either in full or in part. Please refer to our website for further details on the full league table and criteria for the RAM League Tables.
The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security's market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations, transfer and convertibility risks, repatriation risk, currency risk or any other risk apart from credit risk.
RAM Ratings receives compensation for its rating services, normally paid by the issuers of such securities or the rated entity, and sometimes third parties participating in marketing the securities, insurers, guarantors, other obligors, underwriters, etc. The receipt of this compensation has no influence on RAM Ratings' credit opinions or other analytical processes. In all instances, RAM Ratings is committed to preserving the objectivity, integrity and independence of its ratings. Rating fees are communicated to clients prior to the issuance of rating opinions. While RAM Ratings reserves the right to disseminate the ratings, it receives no payment for doing so, except for subscriptions to its publications.
Similarly, the disclaimers above also apply to RAM Ratings' credit-related analyses and commentaries, where relevant.
-Ends-
Media contact:
Ang Swee Ee
+603 7628 1054
sweeee@ram.com.my
Published by RAM Rating Services Berhad
© Press Release 2015
