PETALING JAYA: The Malaysian government has priced its ¥200 billion (RM7.3 billion) 10-year Samurai bond at a coupon rate of 0.63% per annum.
This will be the largest Japan Bank for International Cooperation (JBIC)-guaranteed sovereign bond issuance in the market.
The Ministry of Finance (MoF) said in a statement that this also marks the government’s return to the Japanese yen bond market after a 30-year absence.
MoF noted that the issuance has been received extremely well across the investor spectrum and picked up by quality Japanese investors. These investors are specialised banks (37.9%), city banks (35%), life insurance companies (13.9%), regional banks (6.5%), shinkin banks (3.8%) and others (2.9%).
As part of a government-to-government arrangement, the issuance is guaranteed by JBIC under its “Guarantee and Acquisition toward Tokyo market Enhancement” programme, the first JBIC guarantee undertaken by Malaysia.
Proceeds from the offering will be used by the government for its general purposes, financing development expenditures that among others include building schools, hospitals, public roads and utilities.
MoF said the issuance process commenced with a two-day investor road show in Tokyo on February 7 and 8, which was led by the Finance Minister Lim Guan Eng. This was followed by an official marketing exercise from March 4 to March 7.
MoF noted that during the engagement period, investors expressed strong interest towards the issuance and this reflected their confidence towards Malaysia’s stable macroeconomic fundamentals, governance and structural reforms.
Mizuho Bank, HSBC Malaysia and Daiwa Securities in collaboration with Affin Hwang Investment Bank acted as joint lead arrangers and bookrunners for this issuance.
