Maybank completes RM2.5bil AT1 sukuk mudharabah issuance

Malayan Banking Bhd, commonly known as Maybank, has recently concluded the issuance of RM2.5 billion in additional tier 1 (AT1) sukuk mudharabah, as per a Bursa Malaysia filing. The perpetual sukuk is divided into three series, each with distinct nominal amounts: RM750 million, RM1.10 billion, and RM650 million respectively. The first tranche, RM750 million, boasts a fixed distribution rate of 4.85% per annum until its first call date on September 29, 2031.

The second tranche, RM1.10 billion, carries a slightly higher fixed distribution rate of 5.11% per annum until its first call date on September 28, 2033. Lastly, the third tranche amounts to RM650 million, offering a fixed distribution rate of 5.15% per annum until its first call date on September 26, 2036. These rates are determined by the prevailing five-year, seven-year, and 10-year Malaysian Government Securities rates, all of which are adjusted with specific initial spreads of 0.98%, 0.97%, and 0.98% per annum, respectively.

The primary purpose of these funds is to engage in shariah-compliant activities, including the acquisition of various Islamic financial instruments, both in ringgit and foreign currencies, that have been approved by both Bank Negara Malaysia's Shariah Advisory Council and the Securities Commission Malaysia's Shariah Advisory Council.

Furthermore, these proceeds will also be utilized to fund the Islamic business operations of Maybank's subsidiaries and overseas branches, as well as other shariah-compliant business activities. The returns generated from these investments would be periodically distributed to the sukuk holders, with distributions being made on a semi-annual basis. The sukuk has been granted an AA3 rating by RAM Rating Services Bhd.