Public Sector Home Financing Board issues maiden RM4b sukuk

PETALING JAYA: The Public Sector Home Financing Board (LPPSA), a statutory body established under the Public Sector Home Financing Board Act 2015, successfully issued its maiden sukuk of up to RM4.0 billion to finance the provision of housing loans to the civil servants yesterday.
The issuance was oversubscribed more than three times. The sukuk issued in tranches of three-year to 30-year was priced at 3.5% to 4.90% per annum across tenures.
LPPSA said in a statement the strong demand demonstrates LPPSA’s credential as a new sukuk issuer with a strong credit standing.
The RM4.0 billion sukuk forms part of LPPSA’s RM25.0 billion Islamic Commercial Papers/Islamic Medium Term Notes Programme and is guaranteed by the Malaysian government.
Offered through a book-building process, orders totalled RM13.395 billion, representing 68 investors.
“There was already an indication of strong interest in LPPSA sukuk based on the overwhelming turnout of investors as we officially launched LPPSA and announced the maiden issuance at the investors’ presentation in July 2016. We believe that underlying the investors’ support is the market confidence in LPPSA’s financial strength and solid credit standing as a sustainable self-financing body under the Ministry of Finance entrusted with the provision of housing loans to the civil servants,” LPPSA chairman Tan Sri Mohd Irwan Serigar Abdullah said in a statement.
Affin Hwang Investment Bank, AmInvestment Bank, Bank Islam Malaysia, CIMB Investment Bank, Maybank Investment Bank, OCBC Bank (Malaysia) and RHB Investment Bank were the joint lead managers and joint book runners for the book-building.
CIMB Investment Bank was the facility agent and RHB Islamic Bank the syariah adviser for the programme.