Khazanah-backed SPV to double Islamic bond issuance to RM20b

Khazanah-backed SPV to double Islamic bond issuance to RM20b
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KUALA LUMPUR (Nov 16): Malaysia sovereign wealth fund Khazanah Nasional Bhd’s special purpose vehicle (SPV) Danum Capital Bhd has proposed to upsize its RM10 billion Islamic bond or sukuk issuance known as the Sukuk Danum Programme to RM20 billion, according to CIMB Investment Bank Bhd, which is facilitating the bond scheme.

CIMB Investment said in a filing with Bank Negara Malaysia’s Fully Automated System for Issuing/Tendering (FAST) website that based on clause 3.7(b) of the trust deed for the Sukuk Danum Programme, the sukukholders are deemed to have provided their upfront consent for any upsizing of the Sukuk Danum Programme from time to time. 

"Hence, no further consent is required from the sukukholders, the sukuk trustee or any other party under the Sukuk Danum Programme for the issuer (Danum) to exercise the option to upsize,” CIMB Investment said.

"The proposed changes pertain to replacement of Khazanah's existing role as the investment wakeel under the Sukuk Danum Programme by Khazanah's wholly-owned SPV, Wakeel Capital Sdn Bhd (company registration no. 202101014871 (1415171-T),” CIMB Investment said.

CIMB Investment said Danum has requested for the sukuk trustee CIMB Islamic Trustee Bhd’s concurrence on the proposed changes pursuant to clause 24 of the trust deed.

"Following the letter issued by the issuer (Danum) to the sukuk trustee dated Nov 9, 2021, please be informed that the issuer is proposing to upsize the Sukuk Danum Programme, which was established by the issuer with Khazanah (company registration no. 199301020767 (275505-K)) as the obligor, from RM10 billion to RM20 billion in nominal value and undertake the proposed changes to the structure of the Sukuk Danum Programme. 

"Please be informed accordingly and please refer to CIMB Islamic Trustee, the sukuk trustee for further information on the above,” CIMB Investment said.

According to Khazanah’s website, Khazanah's Islamic medium-term notes (IMTN) issued by its SPVs comprise RM28 billion worth of bond schemes.

Besides Danum’s RM10 billion Islamic bond scheme under the Wakalah principle, Khazanah’s Islamic bond schemes include Danga Capital Bhd’s RM10 billion Islamic Securities Programme under the Musyarakah principle, Rantau Abang Capital Bhd's RM7 billion Islamic MTN Sukuk Musyarakah Programme and Ihsan Sukuk Bhd’s RM1 billion Islamic MTN Sukuk Ihsan Programme under the Wakalah principle, according to Khazanah.

Khazanah, which has also issued foreign currency-denominated bonds, said that since 2004, Khazanah continues to issue exchangeable sukuk and bonds as well as plain vanilla sukuk and bonds to meet its US dollar funding requirements.

Foreign-currency facilities issued by Khazanah SPVs comprise Cerah Capital Ltd's US$500 million (about RM2.08 billion) scheme and Cindai Capital Ltd’s US$320.8 million programme, according to Khazanah.

Khazanah said Cerah Capital’s bond scheme involves CIMB Group Holdings Bhd as the bond scheme’s reference securities while Cindai Capital’s bond programme involves CITIC Securities Co Ltd’s H-shares as Cindai Capital’s bond programme’s reference securities.

Chong Jin Hun