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Thursday, July 18, 2024

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MBSB issues first sustainability Sukuk for a Malaysian Islamic bank

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.

MBSB Sustainability Sukuk Wakalah
RM300 million

April 2022
Summary of terms and conditions


Malaysian Trustee



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)

Mode of issue

Private/direct placement, bought deal, bookbuilding


Finance green and social-related projects


Tranche 1: Five years

Tranche 2: Seven years

Profit rate

Tranche 1: Malaysian Government Securities +95bps (4.36%)

Tranche 2: Malaysian Government Securities +95bps (4.73%)




Malaysian ringgit

Maturity date

Tranche 1: April 2027

Tranche 2: April 2029

Lead manager(s)

Maybank Investment Bank

Principal advisor(s)

Maybank Investment Bank

Lead arranger(s)

Maybank Investment Bank

Sustainability structuring advisor

Maybank Investment Bank


Maybank Investment Bank

Governing law

Malaysian law

Legal advisor(s)/counsel

Adnan Sundra & Low


FAST Malaysia

Underlying assets

Shariah compliant commodities

Credit rating agency


Shariah advisor(s)

Maybank Islamic


Wakalah Bi Al Istithmar, Tawarruq



Investor breakdown

Institutional investors, insurance and Takaful companies, fund and asset management companies, financial institutions and high-net-worth investors

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