Danainfra plans RM1.5b sukuk

Malay Mail, 4 October 2012

Sukuk tranche next month to finance Sungai Buloh-Kajang MRT line

TO FUND the Sungai Buloh-Kajang mass rapid transit (MRT) project, DanaInfra Nasional Bhd is finalising plans to issue a RM1.5 billion sukuk tranche by mid-November, with one portion to be marketed as retail bond as mooted in Budget 2013.

The issuance, part of the RM8 billion Islamic commercial papers/Islamic medium-term notes (ICP/IMTN) programme signed in early July, will see one fifth of it - or RM300 million - being floated as retail bonds, said officials involved in the issuance.

“This is an opportunity to widen the investor base for the MRT project. However, should retailers fall short, we expect the corporates to snap up the retail bond portion,” DanaInfra principal officer Fazlur Rahman Ebrahim (pic) told The Malaysian Reserve.

DanaInfra, a Ministry of Finance Incorporated unit, was formed in June 2010 as an infrastructure finance entity to help finance the country’s biggest construction project.

Prime Minister Datuk Seri Najib Razak, who is also the finance minister, had proposed in Budget 2013 that DanaInfra issue a RM300 million retail bond by end-2012 to finance MRT developments.

To encourage companies to issue retail bonds and retail sukuk, Najib had said the government was proposing that additional expenses incurred in the issuance of retail bonds and retail sukuk be given a double deduction for a period of four years effective from the year of assessment 2012 to 2015.

At the same time, individual investors are also given stamp duty exemption on instruments relating to the transactions of retail bonds and retail sukuk, Najib said.

The latest RM1.5 billion issuance comes after an earlier RM2.4 billion sukuk from DanaInfra for the MRT project, which had included RM1 billion as a bridging loan. — Full story in The Malaysian Reserve

(Web Source: http://www.mmail.com.my/story/danainfra-plans-rm15b-sukuk-32315)