UOB Malaysia establishes inaugural Islamic debt programme

Tier 2 Sukuk Wakalah was given a fixed profit rate of 4.01% per annum.

UOB Malaysia has established its inaugural Islamic debt programme.

The programme allows up to RM5b to be raised in Malaysia under the Shariah principle of Wakalah Bi Al-Istithmar.

To start, UOB Malaysia successfully priced its debut Islamic debt, a RM500 million Basel III-compliant Tier 2 subordinated Islamic medium term note or Tier 2 Sukuk Wakalah. UOB Malaysia gave it a fixed profit rate of 4.01% per anuum, thanks to it being oversubscribed 3.39 times with a final order book of RM1.7b. This is due in February 2034 and callable in February 2029.

At 45 basis points above the benchmark Malaysian Government Securities (MGS), this was the tightest spread ever recorded for a Tier 2 capital instrument in the Ringgit-denominated market, UOB Malaysia said.

CIMB Investment Bank and UOB Malaysia acted as Joint Principal Advisers, Joint Lead Arrangers and Joint Lead Managers for this transaction.

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