Launch Partners

Sunday, December 10, 2023

Launch Partners

Case study: UDA Holdings’s six-month Sukuk

UDA Holdings (UDA), a Malaysian state-owned investment and property development company, issued a RM25 million (US$5.22 million) six-month Sukuk facility on the 28th July 2023. The short-term paper follows its RM500 million (US$104.47 million) Sukuk facility to finance its development projects including Waqf floated in May this year.

UDA established its Islamic commercial papers and Islamic medium-term notes program with an aggregate limit of RM1 billion (US$208.95 million) in April this year, with RHB Investment Bank appointed as the principal advisor for the programs.

Prior to the launch of the program, MARC Ratings assigned a ‘Gold’ impact assessment to UDA’s Sustainability Sukuk Framework. According to the rating agency, the sustainability issuances under the program will contribute to SDGs under the green and social categories.

Lo Teck Mun, the senior manager for debt capital markets at RHB Investment Bank, previously confirmed to ISFI that the program will provide revolving capital for the financing of commercial, housing, industrial and Waqf development projects.

Established in 1971 as the Urban Development Authority, UDA has been wholly owned by the Minister of Finance Incorporated since 2009.

“UDA’s activities have expanded to include the development of green building projects, affordable housing and joint ventures in developing Waqf land,” MARC Ratings remarked.

The property developer’s Waqf projects for this year include the ‘Amaanee’ condominium project and the ‘Wakaf Seetee Aishah 2’ shop office project in the state of Penang.

UDA works with state religious authorities to develop Waqf properties. Under this collaboration, IFN previously learned the Ijarah concept is used where UDA leases the property from the respective authority while the ownership of the property remains with the authority.

UDA Holdings’ Six-Month Sukuk

RM25 million (US$5.22 million)

28th July 2023
Summary of terms and conditions
UDA Holding
Size of issue
RM25 million (US$5.22 million)
To finance property development projects and joint development projects, among others.
Six months
Malaysian ringgit
Maturity date
26th January 2024
Lead manager(s)
RHB Investment Bank
Principal advisor(s)
RHB Investment Bank
Governing law
Malaysian law
Legal advisor(s)/council
Mohamed Ridza & Co
Islamic structure
Wakalah Bi Istithmar
Underlying asset
Shariah compliant
‘MARC-1IS/AA-IS’ by MARC Ratings
Shariah advisor(s)
RHB Islamic

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