Business

Thursday September 10, 2009

Prasarana offers RM2bil Islamic bonds

By YVONNE TAN


PETALING JAYA: State infrastructure company Syarikat Prasarana Negara Bhd has started marketing RM2bil worth of Islamic bonds or sukuk to raise funds for projects, according to a Bloomberg report yesterday.

Prasarana, which owns the assets of two light rail transit lines (the Ampang Line and Kelana Jaya Line), said it might price 15-year notes to yield between 0.43 and 0.58 percentage point more than Malaysian government securities (MGS) of similar maturity, according to the report that cited an e-mail to investors.

It said the transport operator was also marketing 20-year bonds that could be offered from 0.45 to 0.6 percentage point more than similar maturity government bonds.

Maybank Investment Bank Bhd and CIMB Investment Bank Bhd will help in the sale of the bonds. The marketing period ends tomorrow.

“The momentum for corporate bonds, or bonds sold by companies, is certainly picking up given rising risk appetite, improving economic outlook and the stable interest rate environment,” said Dr Yeah Kim Leng, chief economist at RAM Holdings Bhd.

“The lower risk aversion leads to higher-yielding investments such as corporate bonds,” he added.

The current yield of 15-year MGS (AAA) is 4.45% while the yield of 15-year corporate bonds (AAA) is 5.78%, according to data from Bond Pricing Agency.

Malaysian corporate bonds were expected to outperform government securities in the next six months as a revival in earnings and initial public offerings improved company finances, AmBank Bhd general manager of credit research and strategy Fu Yew Sun told Bloomberg yesterday.

Ringgit-denominated corporate bonds gave investors a 3.7% year-to-date gain against a 0.6% loss on government notes.

In 2008, however, government securities gave 8% in returns, outperforming corporate bonds for the first time in four years as a credit freeze curbed investor appetite for riskier investments.

An earlier report in March said Prasarana planned to sell up to RM4bil of Islamic bonds to raise funds for projects, including rail line extensions.

Prasarana’s bond sale comes on the heels of state-owned Petroliam Nasional Bhd, which recently sold US$4.5bil (RM15.88bil) worth of bonds, the largest US dollar-denominated sale by an Asian entity ex-Japan so far this year.

The national oil company has budgeted US$12bil as capital expenditure for the current financial year ending March 2010, mainly for the development of resources locally and abroad.

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