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Friday April 29, 2011

CIMB completes sukuk issue


KUALA LUMPUR: CIMB Group Holdings Bhd’s Islamic banking unit, CIMB Islamic Bank Bhd, completed the issuance of RM250mil Tier 2 junior sukuk on April 21, which was priced at 4.2% per annum.

“The AA1-rated junior sukuk with a maturity of 10 years is callable at year five and on each subsequent distribution date. Priced competitively at 4.2% per annum, the junior sukuk is not subject to any step up distribution rate after the call date,” CIMB said in a statement yesterday.

On April 14, CIMB Group also completed the issuance of a RM500mil 5-year medium term note (MTN), to refinance existing credit facilities.

The MTN, rated AA1 by RAM, pays a coupon of 4.2% per annum.

“Both the Junior Sukuk and the MTN received overwhelming responses from investors, with both issuances about three times subscribed. The final pricing of 4.2% per annum for both issuances is very attractive, at approximately KLIBOR + 0.15%. The current market environment remains very conducive for corporate issuers including banks to tap the fixed income markets,” said CIMB Group deputy CEO and treasurer Datuk Lee K Kwan.

CIMB Bank Bhd had earlier secured several US dollar term loan facilities for tenures of three and four years on an unsecured floating rate basis, with all-in pricing of 0.90%-0.98% per annum above LIBOR. The loans will refinance maturing US Dollar liabilities with long term facilities at attractive costs.

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