SINGAPORE (Apr 15): The Government of Malaysia kicked off bookbuilding on its much-anticipated sukuk this morning, showing tenors of 10 and 30 years at guidance of around 135bp and 185bp over US Treasuries, respectively.
The 144A/Reg S offering follows a week of roadshows that ended in New York yesterday evening.
Joint leads CIMB, HSBC and Standard Chartered are using the outstanding bonds of Malaysian state-owned Petronas as references. Petronas' US$1.5bn 3.50% due 2025 is quoted at 126bp over US Treasuries, or a cash price of 102.700, while its 4.50% sukuk due 2045 is at 175bp, or 103.585.
Based on guidance alone, the sovereign is providing a small pick-up, but, if demand proves robust, this is likely to be narrowed.
Malaysia Sovereign Sukuk will be the issuer of the Islamic notes, and the Government of Malaysia, rated A3/A- (Moody's/ S&P), will be the obligor.
The issue is indicated as benchmark size. Proceeds will be used for the government's general purposes, including the redemption of an existing US$1.25bn trust certificates due this year.