PLUS issues world’s largest Sukuk worth RM30.6 billion

KUALA LUMPUR: Projek Lebuhraya Usahasama Bhd (PLUS) is set to issue RM30.6 billion Sukuk –the largest global Sukuk and Malaysia’s single largest bond issuance to date.
The Sukuk issuance, scheduled for Jan 12, follows the privatisation of PLUS Expressways Bhd (PEB) and the restructuring of the toll concessions under PEB and Penang Bridge Sdn Bhd (PBSB).
The concession agreements of these highways will be novated to PLUS, a wholly owned subsidiary of PLUS Malaysia Sdn Bhd – the investment vehicle of UEM Group Bhd (51 percent) and the Employees Provident Fund Board (EPF; 49 per cent).
Proceeds from the Sukuk issuance will be utilised to part finance the purchase of assets, liabilities, businesses, undertakings and rights of five toll concessions.
They include Projek Lebuhraya Utara-Selatan Bhd, Expressway Lingkaran Tengah Sdn Bhd, Konsortium Lebuhraya Butterworth-Kulim Sdn Bhd, Linkedua (Malaysia) Bhd and PBSB.
The proceeds will also be utilised to fund capital expenditure, working capital and other general funding requirements.
PLUS had successfully raised the required long term financing via the establishment of up to RM34.35 billion nominal value Islamic Medium Term Notes Programmes within a compressed timeline notwithstanding the magnitude of the issuance size.
The repayment profile of the Sukuk ranges from 5 to 27 years and the weighted average yield is approximately 5 per cent.
The Sukuk was accorded the highest long-term rating of AAA by Malaysian Rating Corporation Bhd (MARC), reflecting the strong credit strength of PLUS Bhd and its importance to the Malaysian Government.
A signing ceremony was held recently to commemorate the establishment and issuance of the Sukuk.
The signatories were Datuk Izzaddin Idris, Group Managing Director/Chief Executive Officer of UEM Group, and Datuk Shahril Ridza Ridzuan, Deputy Chief Executive Officer (Investment) of the EPF.
Other signatories included Datuk Seri Nazir Razak, Group Chief Executive, CIMB Group. CIMB Investment Bank Bhd was appointed the Financial Adviser, Sole Principal Adviser, Sole Lead Arranger and Joint Lead Manager for the transaction.
Representing other Joint Lead Managers of the transaction and present at the signing ceremony were Kok Tuck Cheong, CEO of AmInvestment Bank Bhd; Datuk Seri Abdul Wahid Omar, President and CEO of Maybank Group; and Mike Chan, Officer-in-Charge of RHB Investment Bank.
Commenting on the transaction, Izzaddin Idris said: “The successful issuance and strong demand for our Sukuk demonstrates the depth and liquidity of the local market. It is also an indication of investors’ confidence towards PLUS’ operations and assets.
“I am pleased that not only are we able to successfully issue one of the world’s largest Sukuk but we are able to play a role in further enhancing Malaysia’s prominence in international Islamic capital markets in line with the Government’s aspiration to establish Malaysia as an Islamic financial hub.”
Shahril Ridza Ridzuan added: “We are confident our investment in PLUS will provide a long term and stable source of income that fits EPF’s risk-return criteria. This investment is part of our overall strategic allocation of assets into low volatility and long-term sectors. The successful Sukuk fund-raising exercise will secure a long-term profile of returns that matches our asset-liability requirements.”
Nazir commented on the significance of the event, saying: “The signing ceremony represents the culmination of our joint efforts, and I am proud to say that we have made a few landmark deals along the way.
“At RM23 billion, PEB’s delisting was the largest privatisation exercise in 2011 and the 2nd largest ever in Malaysia. And to fund this privatisation as well as the purchase of PBSB from UEM Builders Bhd, we arranged the largest syndicated loan in ASEAN in 2011. But the icing on the cake must surely be the Sukuk issuance – at RM30.6 billion, the largest ever Sukuk issuance in the world,” he said

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