MBSB Bank (MBSB) has issued the first sustainability Sukuk for a Malaysian Islamic bank. The dual tranche issuance worth RM300 million (US$68.49 million) was issued under its RM5 billion (US$1.14 billion) sustainability Sukuk Wakalah program. The proceeds will be channeled toward financing the bank’s green and social-related projects in line with its strategic plan to actively participate in renewable energy and essential services. The offering received overwhelming demand with a bid to cover ratio of 10 times with a final orderbook received of RM2.9 billion (US$661.23 million).
“The offering marks our first sustainability Sukuk issuance in the domestic capital markets which demonstrates MBSB Bank’s strong commitment towards supporting the government’s sustainability agenda and initiatives. We are indeed very pleased with investors’ strong response and the outcome of the transaction,” Nor Azam M Taib, MBSB’s acting CEO, commenting on the transaction, shared.
Several parties contributed significantly to the Sukuk issuance. MBSB and Maybank Investment Bank signed the agreement to establish the Sustainability Sukuk Wakalah program on the 22nd February 2022. The Sukuk program received an ‘A+IS’ final rating from Malaysian Rating Corporation (MARC) with a stable outlook.
The UK government’s ASEAN Low Carbon Energy Programme supported the development of MBSB Bank’s Sustainability Sukuk Framework (SSF). Assigning the framework a ‘Silver’ sustainability Sukuk assessment, MARC opined that the projects under the SSF have the potential to facilitate adjustments toward a more sustainable development trajectory and to meaningfully advance national-level SDGs. MBSB’s SSF supports and contributes to the achievement of the following UN SDGs:
“This landmark transaction will create a multiplier effect when MBSB Bank supports its customers who are involved in eligible green and/or social projects. We look forward to bringing more of our sustainability-first ideation, in line with our priority of advancing ESG in the financial and capital markets,” Fad’l Mohamed, CEO of Maybank Investment Bank, commented.
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MBSB Sustainability Sukuk Wakalah RM300 million  April 2022 |
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| Summary of terms and conditions | |
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Issuer |
Malaysian Trustee |
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Obligor |
MBSB Bank |
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Size of issue |
RM300 million (US$68.49 million) Tranche 1:RM200 million (US$46.98 million) Tranche 2:RM100 million (US$23.49 million) |
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Mode of issue |
Private/direct placement, bought deal, bookbuilding |
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Purpose |
Finance green and social-related projects |
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Tenor |
Tranche 1: Five years Tranche 2: Seven years |
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Profit rate |
Tranche 1: Malaysian Government Securities +95bps (4.36%) Tranche 2: Malaysian Government Securities +95bps (4.73%) |
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Payment |
Annual |
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Currency |
Malaysian ringgit |
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Maturity date |
Tranche 1: April 2027 Tranche 2: April 2029 |
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Lead manager(s) |
Maybank Investment Bank |
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Principal advisor(s) |
Maybank Investment Bank |
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Lead arranger(s) |
Maybank Investment Bank |
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Sustainability structuring advisor |
Maybank Investment Bank |
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Bookrunner(s) |
Maybank Investment Bank |
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Governing law |
Malaysian law |
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Legal advisor(s)/counsel |
Adnan Sundra & Low |
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Listing |
FAST Malaysia |
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Underlying assets |
Shariah compliant commodities |
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Credit rating agency |
MARC |
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Shariah advisor(s) |
Maybank Islamic |
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Structure |
Wakalah Bi Al Istithmar, Tawarruq |
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Tradability |
Yes |
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Investor breakdown |
Institutional investors, insurance and Takaful companies, fund and asset management companies, financial institutions and high-net-worth investors |