PETALING JAYA: MBSB Bank Bhd has signed an agreement with Maybank Investment Bank Bhd (Maybank IB) for the establishment of a RM5bil sustainability sukuk wakalah programme, placing the former in the sustainability space.
Proceeds raised from the sukuk will be utilised to finance or refinance, in part or in whole, future and existing eligible syariah-compliant financings, including the construction and development of eligible projects which will be identified by the bank’s sustainability sukuk framework.
The sukuk programme is MBSB Bank’s first sustainability sukuk platform and is the first of its kind in the world to be issued by an Islamic bank.
The sustainability sukuk wakalah programme will have a perpetual programme tenure and has been accorded a preliminary rating of a+is by Malaysia Rating Corp Bhd.
It is also in compliance with the Securities Commission’s sustainability and responsibility investment sukuk framework, the Asean capital markets forum’s green, social and sustainability bond standards, and the International Capital Markets Association’s green, social and sustainability bond principles.
“This sustainability sukuk programme is essential in placing MBSB Bank in the sustainability space and in line with the current banking industry theme.
“It also allows the bank to continue to grow our sustainably-generating assets including lending in green projects, affordable housing, public health, education, small and medium enterprise financing and also the underserved segments,” said MBSB Bank’s acting chief executive officer Datuk Nor Azam M. Taib in a statement yesterday.
He added that the sustainability label attached to the sukuk offers diversification to investors given the growing demand for sustainability sukuk in the market.
“This also enables the bank to have access to a larger pool of investors including those with dedicated environmental, social and governance (ESG) mandates.”
Sustainability sukuk is a financial instrument where the proceeds raised from the sukuk issuance are exclusively utilised for the purpose of funding eligible sustainability projects.
Meanwhile, Maybank Investment Bank chief executive officer Datuk Fad’l Mohamed said the landmark transaction will create a multiplier effect when MBSB Bank supports customers who are involved in eligible green and social projects.
“We look forward to bringing more of our sustainability-first ideation, in line with our priority of advancing ESG in the financial and capital markets,” he said.
Maybank IB is the sole principal adviser, sole lead arranger, sole lead manager and sole sustainability structuring adviser while Maybank Islamic is the syariah adviser for the sustainability sukuk programme.