KUALA LUMPUR: Malaysian pension fund Kumpulan Wang Persaraan (KWAP) has subscribed for the first tranche of Malaysian Airline System (MAS) RM2.5 billion (US$788.77 million) sukuk, or Islamic bond, programme, MAS’ chief Ahmad Jauhari Yahya said today.
The programme is the world’s first corporate perpetual sukuk, a debt-equity hybrid that was approved by Malaysia’s regulator in May.
“KWAP is the first subscriber of the perpetual sukuk with RM1 billion,” he told reporters at the signing ceremony for the sukuk programme.
“We are also happy to announce that we have obtained firm commitments for the remaining RM1.5 billion, and I am delighted to announce that our entire sukuk programme is fully subscribed.”
Ahmad Jauhari said the rest of the subscribers were locally based.
The junior perpetual sukuk will help the national carrier improve its balance sheet and gearing as it was recognised as equity capital under Malaysian accounting standards and at the same time, provided a reasonable long-term funding rate of 6.9% per annum, he said.
Maybank Investment Bank is the principal adviser, lead arranger and sole lead manager for the sukuk programme.
KWAP is entitled to call for repayment of the sukuk perpetual programme after 10 years, at its own discretion, said Maybank Investment Bank’s chief Zafrul Tengku Aziz.