Wednesday, January 26, 2011

PAAB sukuk upsized to RM2.7b on strong demand

KUALA LUMPUR: Pengurusan Aset Air Bhd's (PAAB) issuance of RM2.5 billion Islamic medium term notes was upsized to RM2.7 billion and was successful priced following strong demand from investors.

PAAB said on Wednesday, Jan 26 the sukuk, issued by PAAB's unit Pengurusan Air SPV Bhd, saw initial orders increase to RM7.1 billion when books opened for the two-day book-building period.

The orders rose to a high of RM10.4 billion which was a bid-to-cover ratio of 4.16 times on the initial deal size of RM2.5 billion, said PAAB, which is undertaking the nation's water restructuring exercise.

'The sukuk carries a semi-annual profit rate of 3.64% per annum for the three-year tranche, 3.92% per annum for the five-year tranche and 4.43% per annum for the 10-year tranche. The sukuk were priced at the tightest end of the final price guidance,' it said.

The RM2.7 billion three, five and 10 year sukuk was issued under PAAB's RM20 billion nominal value sukuk.

CIMB Investment Bank Bhd and HSBC Amanah Malaysia Bhd are the joint lead arrangers and joint lead managers for the sukuk issue for PAAB,

Investors that participated in the offering including government agencies, financial institutions, fund managers, insurance companies, corporate accounts and offshore investors.


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