| Type | Announcement |
| Subject | PROPOSED ISLAMIC SUBORDINATED BONDS ISSUANCE OF RM1.0 BILLION WITH A TENURE OF 10 YEARS FROM ISSUE DATE ON A 10 NON-CALLABLE 5 BASIS ("the Islamic Subordinated Bonds") |
Aseambankers Malaysia Berhad on behalf of Maybank is pleased to announce that Maybank has priced its Islamic Subordinated Bonds at a profit rate of 4.48%.
The Islamic Subordinated Bonds, which qualifies as Tier 2 capital for purposes of Malaysian capital adequacy regulations, has been approved by both the Securities Commission and Bank Negara Malaysia.
Under the 10 non-callable 5 basis feature, Maybank shall have the option to redeem the Islamic Subordinated Bonds on the 5th anniversary or any semi-annual date thereafter. Should Maybank not exercise its option to redeem, the holders of the Islamic Subordinated Bonds will be entitled to an annual incremental step-up profit rate from the beginning of the 6th year to the final maturity date.
The Islamic Subordinated Bonds Issuance marks the largest Ringgit subordinated debt to be issued by a domestic financial institution to date and the first of its kind to be Syariah compliant. The investors of the Islamic Subordinated Bonds represent a broad range of investors ranging from insurance companies, financial institutions, asset management companies and government agencies.
The positive response demonstrates investors’ confidence and support towards the Islamic Subordinated Bonds and Maybank is particularly proud to be first in bringing this innovative Syariah compliant debt issuance to the capital market.
2. DETAILS OF THE ISLAMIC SUBORDINATED BONDS ISSUE
2.1 Utilisation of Proceeds
The proceeds from the Islamic Subordinated Bonds will be utilised to fund Maybank’s Islamic financial activities.
2.2 Rating
The Islamic Subordinated Bonds has been rated AA1 by Rating Agency Malaysia
2.3 Summary Terms of the Islamic Subordinated Bonds Issue
| Instrument: | RM1.0 billion aggregate nominal value Islamic Subordinated Bonds. The Islamic Subordinated Bonds will qualify as Tier 2 capital of Maybank for purposes of Malaysian capital adequacy regulations. |
| Islamic Principle Used | The Islamic Subordinated Bonds have been structured based on the Syariah principle of Bai Bithaman Ajil. |
| Identified assets | The Islamic assets shall be a pool of specifically identified assets under the Al-Ijarah Thumma Al-Bai financing contracts for purchase of motor vehicles concluded between customers and Issuer. |
| Principal Amount: | RM1.0 billion |
| Issue Price: | At par. |
| Profit Rate (%) | 4.48% Unless the Islamic Subordinated Bonds are redeemed on the 5th anniversary or any semi-annual date thereafter, the holders of the Islamic Subordinated Bonds will be entitled to a permissible step-up profit rate from the beginning of the 6th year to the final maturity date. |
|
||
|
Year
|
Incremental Step-Up Profit Rate
(basis points) |
Cumulative Step-Up Profit Rate
(basis points) |
|
6
|
40
|
40
|
|
7
|
20
|
60
|
|
8
|
20
|
80
|
|
9
|
10
|
90
|
|
10
|
10
|
100
|
| Listing: | The Islamic Subordinated Bonds will not be listed on any stock exchange |
| Governing Law: | Laws of Malaysia |
| Selling Restrictions: | Selling Restrictions at Issuance : The Islamic Subordinated Bonds shall not be offered or sold, directly or indirectly in Malaysia other than to persons falling within any of the categories of persons or in the circumstances specified under a. Schedule 2 or Section 38(1)(b); b. Schedule 3 or Section 39(1)(b); and c. Schedule 5 or Section 66(3) of the Securities Commission Act, 1993. Selling Restrictions Thereafter: The Islamic Subordinated Bonds shall not be offered or sold, directly or indirectly in Malaysia other than to persons falling within any of the categories of persons or in the circumstances specified under a. Schedules 2 or Section 38(1)(b); and b. Schedules 5 or Section 66(3) of the Securities Commission Act, 1993. |
3. RATIONALE FOR THE ISLAMIC SUBORDINATED BONDS ISSUE
This would be the first Islamic subordinated bond issuance by Maybank of which the proceeds raised shall be utilised to fund Maybank’s Islamic financial activities.
In addition, the Islamic Subordinated Bonds provide Maybank with an efficient source of capital for future growth in line with Maybank’s capital management strategy.
4. PRINCIPAL ADVISER AND LEAD ARRANGER
The Principal Adviser and Lead Arranger for the Islamic Subordinated Bonds is Aseambankers Malaysia Berhad.
This announcement is dated 14 November 2005.
| Company Name | MALAYAN BANKING BERHAD |
| Stock Name | MAYBANK |
| Date Announced | 14 Nov 2005 |
| Category | General Announcement |
| Reference No | CU-051114-59299 |