KUALA LUMPUR (March 21): Malaysia’s biggest state-owned fund manager, which owns more than 10% of the local stock market, is considering its first sale of exchangeable bonds as it seeks to raise funds for overseas investments.

Permodalan Nasional Bhd is exploring all options including an offering of exchangeable bonds, or notes backed by shares in a listed company, a representative said Thursday in response to Bloomberg queries. PNB recently asked investment banks to submit proposals for the potential deal, people with knowledge of the matter said.

The asset manager hasn’t made a final decision about what the underlying stock would be, according to the people, who asked not to be identified because the information is private. It holds a 48% stake in Malayan Banking Bhd, the country’s biggest lender, valued at more than US$12 billion based on Thursday’s close, data compiled by Bloomberg show.

PNB also owned about 18% of Axiata Group Bhd, the US$9.4 billion wireless carrier, at the end of 2017. Other major holdings include stakes in Sapura Energy Bhd, Sime Darby Bhd and Tenaga Nasional Bhd, according to its website.

The fund is seeking capital in foreign currencies so it can boost its overseas investments, one of the people with knowledge of the matter said. PNB is following in the footsteps of Malaysian sovereign wealth fund Khazanah Nasional Bhd, which usually hits the market once a year with a sale of US dollar exchangeable bonds backed by some of its stock-market holdings.

If PNB decides to proceed, it would likely issue sukuk as it prefers financing methods complying with Islamic principles, according to one person. It could still opt for another form of fundraising, the people said.

PNB managed RM279 billion (US$69 billion) of assets at the end of 2017, with around 70% invested in equities. It plans to diversify its global assets to ensure sustainable returns as part of its five-year strategy, according to the fund’s website.

PNB recently joined hands with Malaysia’s biggest pension fund to buy the commercial property assets at the Battersea Power Station project, where Apple Inc plans to have its UK headquarters.