KUALA LUMPUR: SME Bank has announced the successful issuance of its new five-year sustainability sukuk under the book-building exercise.
The total order for the sukuk issuance exceeded RM1.0 billion, surpassing the initial targeted size of RM500 million, the bank said in a statement today.
The proceeds from the sukuk issuance will be exclusively used to finance projects that are aligned with the environmental, social and governance (ESG) considerations.
"This strategic focus on ESG projects not only contributes to sustainable development but also empowers SME Bank to offer innovative financing solutions tailored to the unique needs of small and medium enterprises," SME Bank added.
The sukuk issuance was led by financial institutions such as RHB Investment Bank Bhd, AmInvestment Bank Bhd, CIMB Investment Bank Bhd and
Maybank Investment Bank Bhd.
Group president and chief executive officer Datuk Wira Dr Aria Putera Ismail said the bank opted to increase the total issuance amount to RM1.0 billion.
This is due to overwhelming demand from local and foreign financial institutions, fund management companies, takaful and insurance firms, and government-linked investment companies.
"This achievement demonstrates the confidence of investors and the wider financial community in SME Bank's ability to drive the SMEs growth, especially in ensuring them to sustain.
"SME Bank sustainability sukuk was priced at a competitive profit rate of 4.05 per cent, amid a challenging market environment," he said.
SME Bank's sukuk wakalah programme was assigned AAA ratings by the Malaysian Rating Corporation Bhd (MARC).
The bank also achieved gold standard, the highest rating under MARC's sustainability sukuk framework.
"The accolades are a testament to SME Bank's strong creditworthiness and unwavering commitment to sustainable practices," it said.
SME Bank head of treasury Mohd Nazri Abu Samah said the MARC rating agency had reaffirmed its AAAIS/MARC-1IS ratings with a "Stable" outlook on SME Bank's Islamic Medium-Term Notes programme of up to RM1.0 billion.
This along with a combined aggregate limit in nominal value of up to RM3.0 billion.
"These ratings underscore SME Bank's solid financial position and its ability to
consistently deliver on its commitments," he added.
SME Bank mentioned that the proceeds from the sukuk issuance will be exclusively used to finance projects that are aligned with the environmental, social and governance (ESG) considerations.
"This strategic focus on ESG projects not only contributes to sustainable development but also empowers SME Bank to offer innovative financing solutions tailored to the unique needs of small and medium enterprises," it said.
SME Bank, a development financial institution wholly owned by the Ministry of Finance and regulated by Bank Negara Malaysia, is a key player in the development of SMEs in Malaysia.