Exsim Capital Resources, an SPV for the Malaysian property developer Exsim Development, issued its debut RM365 million (US$78.19 million) ASEAN Green SRI Sukuk on the 30th November 2023. The paper is backed by future receipts under sales and purchase agreements (SPAs) of green-certified residential property projects.
The issuance is touted as the first green Sukuk in the region backed by SPAs for green-certified residential buildings.
The agreements backing the issuance are for the D’Clover Residences and D’Terra Residences in Damansara Perdana, Selangor. Both projects have been awarded provisional Gold GreenRE certifications.
As per Exsim Capital’s ASEAN Sustainability SRI Sukuk Framework, the proceeds from the issuance will be utilized to acquire the projects from Exsim Development and its subsidiaries including the SPAs signed or to be signed with the end-buyers of the projects and the monies captured under the accounts of the projects.
The projects under the green Sukuk are constructed on a master land title alongside two other development projects.
The developer created a specific debenture incorporating fixed and floating charges over all current and future assets relating to the projects, including the portion of land constructed on, to secure the issuance.
According to NewParadigm Capital Markets, the financial advisor for the Sukuk, the facility was oversubscribed by 3.9 times.
The four-year facility was issued alongside a non-labeled RM9 million (US$1.93 million) six-month Islamic commercial paper (ICP).
According to RAM Ratings, which assigned the green Sukuk a final rating of ‘AA3/Stable’, the future receipts will fund the remaining construction costs of the projects and meet the issuer’s fees, expenses and obligations in respect to the Sukuk and the accompanying Islamic commercial paper.
“The unrated ICP will act as a liquidity line to cover cost overruns, working capital gaps and any shortfalls in the payment of the [green Sukuk] profit and senior expenses,” the ratings agency remarked.
Exsim Development’s SRI Sukuk framework is notably aligned with the disclosure requirements of the Securities Commission Malaysia’s SRI Sukuk Framework, the ASEAN Capital Markets Forum’s ASEAN Green, Social, and Sustainability Bond Standards and the International Capital Markets Association (ICMA)’s Green and Social Bond Principles and Sustainability Bond Guidelines.
It is also aligned with all core areas under the ICMA’s Green and Social Bond Principles’ pre-issuance checklists, RAM Sustainability, which issued the external review of the framework, concluded.
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Exsim Capital Resources’ Debut SRI Sukuk RM365 million (US$78.19 million)  30th November 2023 |
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| Summary of terms and conditions | |
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Issuer |
Exsim Capital Resources |
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Obligor |
Exsim Development |
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Size of issue |
RM365 million (US$78.19 million)
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Mode of issue |
Private placement, book building, tender |
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Purpose |
To develop green residential properties
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Tenor |
Four years |
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Profit rate |
5.6% |
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Payment |
Semi-annual |
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Currency |
Malaysian ringgit |
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Maturity date |
30th November 2041 |
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Lead arranger(s) |
United Overseas Bank Malaysia |
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Principal advisor(s) |
United Overseas Bank Malaysia |
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Governing law |
Malaysian law |
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Legal advisor(s)/council |
Adnan Sundra & Low |
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Islamic structure |
Musharakah arrangement |
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Underlying asset |
Sales and purchase agreements of green-certified residential property projects |
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Rating |
‘AA3/Stable’ from RAM Ratings |
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Shariah advisor(s) |
Dr Mohd Daud Bakar |
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Tradability |
Yes |