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Friday, September 30, 2022

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Air Selangor issues largest SRI Sukuk tranche to date

Pengurusan Air Selangor (Air Selangor) has listed the third tranche of its SRI Sukuk Islamic medium-term notes (IMTN) on the 26th July 2022 in a four-series issuance worth RM900 million (US$201.97 million) combined. Issued under the water service provider’s Murabahah-based Sukuk program of up to RM10 billion (US$2.24 billion), Bank Islam acted as the lead arranger.

Air Selangor issued the first two trances of the Sukuk in 2021. The third-tranche issuance is the largest tranche yet, significantly surpassing the second-tranche issuance at RM570 million (US$127.92 million).

The four-series issuance worth RM120 million (US$26.93 million), RM160 million (US$35.91 million), RM370 million (US$83.03 million) and RM250 million (US$56.1 million) carry tenors of seven, 10, 15 and 20 years with semi-annual coupons of 4.73%, 4.87%, 5.28% and 5.45% respectively.

The proceeds from the issuance will be utilized to finance eligible green and social projects including sustainable water supply projects, sustainable water management projects, renewable energy projects and green buildings and assets.

Air Selangor’s sustainable Sukuk framework, ‘Sukuk Kelestarian’, focuses on projects that contribute to SDG Nos 6, 8, 12, 13 and 16. It is set to publish its first annual impact report for its sustainable Sukuk issuances this year.

“We anticipate the Sukuk Kelestarian to lead to a measurable positive impact on the environment and society, primarily through efficient and sustainable water management systems,” RAM Ratings said, commenting on the potential impact of the framework.

Pengurusan Air Selangor SRI Sukuk T3

RM900 million (US$201.97 million)


26th July 2022
Summary of terms and conditions
Issuer
Pengurusan Air Selangor
Size of issue
RM900 million (US$201.97 million)
Purpose
To finance eligible sustainable projects
Tenor
Series 1: Seven years
Series 2: 10 years
Series 3: 15 years
Series 4: 20 years
Issuance price
RM900 million
Profit Rate
Series 1: 4.73%
Series 2: 4.87%
Series 3: 5.28%
Series 4: 5.45%
Payment
Semi-annual
Maturity date
Series 1: 26th July 2029
Series 2: 26th July 2032
Series 3: 24th July 2037
Series 4: 25th July 2042
Currency
Malaysian ringgit
Lead manager(s)
Bank Islam
Principal advisor(s)
Bank Islam
Governing law
Malaysian law
Legal advisor(s)/council
Shook Lin & Bok
Islamic structure
Murabahah (via Tawarruq arrangement)
Underlying asset
Shariah compliant commodities
Rating
AAA (RAM Ratings)
Shariah advisor(s)
Bank Islam
Tradability
Yes

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