DESPITE a tough economic climate, SME Bank received positive response in its book building endeavour by registering a final order of RM1.78 bil for its maiden Sustainability Sukuk Wakalah Programmes (Sustainability Sukuk).
The whopping amount translates to 3.56 times bid-to-cover (BTC) from the target issuance of RM500 mil on July 21.
“Taking into account of the challenging market situation, we managed to price the issuance at a very competitive profit rate of 3.10%. Interestingly, this Sustainability Sukuk has received overwhelming demand not only from domestic institutional investors but also from foreign asset managers.
“Our investors’ profile is diversified and well supported by financial institutions, fund management companies, insurance companies and Government linked companies.
“The high demand is also driven by awareness movements within and outside the country which continue to support a balanced and sustainable development,” its group president cum chief executive officer Aria Putera Ismail said in a statement.
He added that with the issuance of the Sustainability Sukuk, SME Bank will be encouraged to offer innovative financing solutions for small and medium enterprises (SMEs).
“The banking sector is highly integrated with all aspects of economic activities and can serve as a game changer in promoting awareness amongst the SMEs on the importance of applying the principles of Environment, Social and Governance (ESG) in their business operations.
“This is significant, in view that ESG is already considered the norms internationally and our SMEs should not be left behind if they want to compete globally,” Aria stressed.
The first phase in SME Bank’s ESG journey is to raise awareness amongst SMEs via financing facilities to finance projects that meet the ESG requirements.
“And the second phase is about conducting series of engagements to educate our SMEs not only to use financing to meet their ESG needs, but also to apply the elements in their business operations,” Aria noted.
The SME Bank Sukuk Wakalah Programmes is made up of Islamic Medium Term Notes (IMTN) Programme of up to RM3 bil (including the Sustainability Sukuk) and Islamic Commercial Papers (ICP) Programme of up to RM1 bil, with a combined limit in nominal value of up to RM3 bil.
This first Non-Government Guarantee Sukuk Wakalah Programmes for SME Bank have been accorded AAA ratings by the Malaysian Rating Corporation Bhd (MARC) and also Gold standard for its Sustainability Sukuk Framework, its highest rating. – July 24, 2021
