Malaysia: SME Bank to issue RM3bil (USD1bil) govenment-guaranteed sukuk

KUALA LUMPUR: SME Bank Bhd will issue a RM3 billion (USD1 billion) government-guaranteed Islamic Medium-Term Notes Programme (IMTN Programme) with tenure of up to 20 years for its syariah-compliant working capital requirements.

Its managing director, Datuk Mohd Radzif Mohd Yunus, said the first issuance of the IMTN programme would employ the wakalah structure, which was widely accepted in the Gulf Cooperation Council region.

"The sukuk programme will help us revamp our business model to support growth and empower small and medium enterprise (SME) ecosystem through our network and provide additional funds to assist more SMEs," he told reporters at the signing ceremony of the sukuk issuance here today.

Minister of Finance II Datuk Seri Ahmad Husni Hanadzlah witnessed the signing ceremony.

"The first tranche involves RM500 million for a tenure of seven to 10 years, while the second tranche will probably be issued by year-end or early next year," he said.

In line with the other recent government-guaranteed issuances, income tax payable by investors on the periodic distributions of the bank's sukuk would be remitted in full, Mohd Radzif said.

"The first tranche involving RM500 million for a tenure of seven to 10 years, while the second tranches will probably issue by year-end or early next year," he said.

The sukuk would probably yield 3.5 per cent, however, it still depend on a book-building exercise, said its corporate planning & strategy, vice president/head, Mohamad Sabir Mohamad Sabri.

The bank has appointed AmInvestment Bank Bhd, Kuwait Finance House (M) Bhd and Maybank Investment Bank Bhd as the joint lead arrangers and joint lead managers for the sukuk.

Earlier, SME Bank inked an agreement to set up a RM263 million 1-SME Rationalised Fund with the Ministry of Finance to facilitate and optimise the financing activity and accessibility by target groups.

Under the programme, 18 funds under the supervision of the Ministry of International Trade and Industry were rationalised into five groups managed by SME Bank.

Meanwhile, Husni also launched the SME Revitalisation Scheme (SRS), also known as the "2nd Chance Programme", to help viable but distressed SMEs secure additional financing for the ongoing business.

The scheme is to facilitate the restructuring and rescheduling of "participating financial institutions" financing and to extend additional financing facilities to viable SMEs with delinquent or impaired financing, subject to maximum aggregate financing amount of not more than RM5 million, inclusive new financing under the SRS.

"The initiatives that we are launching today will act as catalysts for the SME industry," Husni said. -BERNAMA
---Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com