The Malaysian National Higher Education Fund or Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN) is not prioritizing developing an SRI Sukuk program although its fund manager has recommended exploring the asset class, a spokesperson from PTPTN told ISFI.
“PTPTN is yet to be involved in SRI Sukuk and will not be in the near future … It is not a main concern right now,” the spokesperson shared.
The higher education fund recently issued a RM105 million (US$22.65 million) Sukuk on the 31st July 2023, under its RM5 billion (US$1.08 billion) government-guaranteed Sukuk Murabahah program.
The proceeds from the Sukuk program will be channeled toward the provision of educational Shariah compliant financing.
According to the PTPTN spokesperson, the education fund recently held an exploratory meeting with its fund manager as its activities and its current use of proceeds give it the opportunity to explore issuing social Sukuk.
PTPTN’s existing government-guaranteed Sukuk program has a remaining limit of RM1.2 billion (US$258.85 million), which may explain why structuring an SRI Sukuk is not at the top of its agenda.
Notably, the higher education fund also confirmed that not only is it not currently working on structuring an SRI Sukuk program, it is also not working on restructuring its existing program into an SRI program.
Adrian Chee, a partner at Adnan Sundra & Low, previously told ISFI in relation to Malaysian Resources Corporation restructuring its Sukuk program that it is cheaper by far for the issuer to revise an existing Sukuk program than to establish a new Sukuk program for issuances of sustainable Sukuk.
Adnan Sundra & Low also acts as the legal counsel for PTPTN’s Sukuk program.
According to Adrian, the benefits of issuing sustainable Sukuk are nuanced from a pricing perspective.
“In terms of whether there are any incentives or pricing benefits for issuing sustainable Sukuk, whilst we note that there have been market-driven efforts in the past to encourage this by offering pricing benefits, the current economic conditions have seen that these pricing benefits are less compelling for newer sustainable Sukuk entering the market,” Adrian explained.
The main benefit of issuing sustainable Sukuk is that it contributes to helping both the issuer and the financial institutions involved meet their financial ESG targets, the lawyer concluded.