Cabinet approves financial decrees

The cabinet meeting has approved issuing of four financial decrees relating to acquiring loans for rebuilding the country and flood prevention, Atchaporn Charuchinda, secretary general of the Council of State, said on Tuesday.
The four proposals were put forward by the strategic committees for rehabilitation and future development and for setting up a water resource management system.
They are needed to help restore the confidence of Thai and foreign investors and to ensure the prevention of a recurrence of the floods in the long term, Mr Atchaporn said.
The Council of State must give advice to the cabinet on whether the issuance of bills and decrees is constitutional. It was not clear why the announcement was made by the Council of State and not the cabinet spokesman.
They decrees relate to the management debt owed by the Financial Institutions Development Fund (FIDF),  empower the Bank of Thailand to provide 300 billion baht for low interest soft loans for flood affected manufacturers, allow the Ministry of Finance to seek 350 billion baht in loans for financing projects to rebuild the country, and establishment of a 50 billion baht insurance fund.
“The restoration of investors’ confidence, the rehabilitation and rebuilding the nation and preventing flooding of  future projects must be rapidly started and therefore the issuance of these four decrees is necessary,” said Mr Atchaporn.
The secretary general of the cabinet would submit these financial decrees to His Majesty the King for royal endorsement, he added.

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PLUS to issue RM30.6b sukuk

Proceeds from the sukuk issuance will go to part-finance the purchase of assets, liabilities, businesses, undertakings and rights of the five toll concessions
Projek Lebuhraya Usahasama Bhd (PLUS) is set to issue RM30.6 billion sukuk – the world’s largest and Malaysia’s single largest bond issuance to date.
Scheduled for January 12, the issuance follows the privatisation
and restructuring of toll concessions under PLUS Expressways Bhd, including the Penang Bridge.
The concession agreements of these highways will be novated
to PLUS, a wholly-owned unit of PLUS Malaysia Sdn Bhd.
The latter is the investment vehicle of UEM Group Bhd and
the Employees Provident Fund (EPF) board on a 51:49 basis.
Proceeds from the sukuk issuance will go to part-finance the purchase of assets, liabilities, businesses, undertakings and rights of the five toll concessions – Projek Lebuhraya Utara-
Selatan Bhd, Expressway Lingkaran Tengah Sdn Kulim Sdn Bhd, Linkedua (Malaysia) Bhd and Penang Bridge Sdn Bhd.
It will also be used to fund capital expenditure, working capital and other general funding requirements. It is noteworthy that PLUS had raised the long-term financing via the establishment of up to RM34.35 billion nominal value Islamic
Medium Term Notes Programmes within a short time despite the size of the issuance.
The sukuk is due to be repaid between five and 27 years and the weighted average yield is around 5.0 per cent.M alaysian Rating Corp Bhd accorded the highest long-term rating of AAA to the
sukuk, reflecting the strong credit strength of PLUS and
its importance to the government.
UEM Group managing director and chief executive officer Datuk Izzaddin Idris and EPF deputy chief executive officer (Investment) Datuk Shahril Ridza Ridzuan sealed the deal
here on Friday.
CIMB Investment Bank Bhd was appointed the financial adviser, sole principal adviser, sole lead arranger and joint lead manager.
The other joint lead managers were AmInvestment Bank Bhd chief executive officer Kok Tuck Cheong, Maybank Group president and chief executive officer Datuk Seri Abdul Wahid Omar and RHB Investment Bank officer-in-charge Mike Chan.
“The successful issuance indicates investors’ confidence in PLUS’ operations and assets,” Izzaddin said.
Shahril said, “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 sectors.”
Meanwhile, CIMB Investment Bank group CEO Datuk Seri Nazir Razak said at RM23 billion, PLUS Expressways delisting was the largest privatisation exercise in 2011 and the second largest ever in Malaysia

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