First Saudi Sukuk issuance in Malaysia by Al Bayan Group
The landmark Sukuk was issued via Al Bayan’s special-purpose vehicle incorporated in Malaysia, ABHC Sukuk Berhad. Proceeds from the issuance, with tenure of three years, will be used by the Group primarily for repayment of existing debt obligations and expanding the Group’s core businesses as well as working capital requirements.
Commenting on the successful issuance of the Sukuk offering, Dr. Abdulrahman Al Hammad, CEO of Al Bayan, said, "Al Bayan's inaugural sukuk issuance in Malaysia is a significant landmark in the Group's evolution and growth story. We are proud of this achievement and look forward to further capitalising on the opportunities for raising Islamic capital available globally. We thank the Joint Lead Managers and all other involved parties for their support in making this transaction a resounding success.”
The Sukuk programme is structured under the Shari’ah principle of Wakalah and Ijarah. Hong Leong Islamic Bank Berhad (HLISB) and HSBC Amanah Malaysia Berhad (HBMS) are the Joint Principal Advisers and Joint Lead Arrangers of the Sukuk Programme. They are also the Joint Lead Managers, together with Kenanga Investment Bank Berhad (KIBB) and Al Hilal Bank as the Manager in the UAE. Guidance Financial Group acted as the Financial Adviser to Al Bayan.
"The Sukuk issuance of Al Bayan here in Malaysia will be another milestone for the country as a premier Islamic finance hub and to further position our Islamic capital market's standing on the global map. The joint efforts between Hong Leong Islamic Bank and the other Joint Lead Managers have made this issuance a success,” said Raja Teh Maimunah, Chief Executive Officer/Managing Director of HLISB. “We are pleased to lead another landmark Sukuk issuance with this debut issuance from the Kingdom of Saudi Arabia tapping the MYR debt markets, following the successful issuance from the Republic of Kazakhstan last year. This issuance marks another key milestone in further enhancing Malaysia’s position as a global Islamic finance hub”, said Rafe Haneef, Chief Executive Officer of HBMS.
Chay Wai Leong, Managing Director of KIBB, said, “Al Bayan’s issuance of Sukuk in the local bond market further testifies to the growing interest from foreign issuers towards Malaysia’s mature Sukuk framework and financial environment. We can expect to see more contributions from foreign issuers to the growth and diversity of our Islamic capital markets. We will continue to work with our associate, AlWasatah Capital based in Saudi Arabia, in bringing Saudi-based issuers to Malaysia.”
The Sukuk Programme has been assigned a long-term rating of AA3(s) by RAM Rating Services Bhd. Under a kafalah agreement in favour of ABHC Sukuk Berhad, Al Bayan shall provide an irrevocable and unconditional guarantee to the holders of the Sukuk. As such, the rating is based on the credit profile of the Group.
Saudi Gazette report Abdullah Al Rasheed, Chief Executive Officer of Wasatah Capital, as saying, “We believe that the success of the Al Bayan’s Sukuk should encourage more Saudi companies to seriously consider this funding source. We also believe that the presence of Kenanga Investment Bank in Malaysia and Wasatah Capital in Saudi Arabia brings a unique value proposition to Saudi companies interested in attracting Malaysian investors.