Tuesday, Jan 25, 2011
(Adds the bond pricing plus context.)
By Elffie Chew
Of DOW JONES NEWSWIRES
KUALA LUMPUR (Dow Jones)--Malaysian state-owned water asset management company Pengurusan Aset Air Berhad has priced its MYR2.5 billion ($818.1 million) Islamic bonds, or sukuk, at the lower end of guidance following strong demand for the offering, a person familiar with the matter told Dow Jones Newswires Tuesday.
"The (order book) is more than four times subscribed (as of 0900 GMT)," the person said, adding that "there is strong interest across all tenors."
The person said that the MYR1 billion worth of 3-year sukuk had been priced at 3.64% while the MYR1 billion worth of 5-year sukuk had been priced at 3.92%. Both paper are priced 35 basis points above the respective 3- and 5-year Malaysian Government Security.
The MYR500 million worth of 10-year sukuk have been priced at 4.43% or 30 basis points above the 10-year benchmark MGS, the person added.
The strong appetite for the first sukuk issuance of the year bodes well for the country's plan to become a global Islamic financial hub, and may encourage more companies to issue sukuk in Malaysia.
Pengurusan Air's shariah compliant bond, which is based on the Islamic principle of commodity murabahah or sale and purchase transaction, is part of a MYR20 billion Islamic medium term note program announced in 2009. The bonds are guaranteed by the Malaysian government.
The bonds will be issued by Pengurusan Air SPV, a special-purpose vehicle set up as a wholly owned subsidiary of Pengurusan Aset Air to undertake the financing of the latter's acquisition of water assets and their accompanying liabilities in Malaysia. The SPV will also be responsible for the subsequent development of state water operators' infrastructure.
-By Elffie Chew, Dow Jones Newswires; (603) 2026 1233; elffie.chew@dowjones.com
(END) Dow Jones Newswires
25-01-11 1044GMT
