Linklaters advises on US$1.5 billion sukuk issued by the Government of Malaysia
Linklaters has advised the Ministry of Finance, Government of Malaysia, on the first sovereign sukuk of the year, valued at US$1.5 billion. It attracted orders of over US$9 billion from Asia, Europe, the Middle East and the United States, making it one of the most prominent sukuk issuances in recent times in Asia. The Reg S/144A sukuk was split into a US$1 billion 10-year tranche and US$500 million 30-year offering.
It was the first 30-year sovereign sukuk ever issued and it was the first time that rights to transportation services were used as an asset class.
CIMB Investment Bank Berhad, The Hongkong and Shanghai Banking Corporation Limited and Standard Chartered Bank are the Joint Bookrunners and Joint Lead Managers for the issuance.
Linklaters’ Capital Markets partner Kevin Wong commented: “the use of transportation rights as an asset class in this issue represents a move towards a more flexible approach with regards to the type of underlying assets used. The strong interest in the sukuk reflects the confidence of international investors in Malaysia’s strong fiscal position. It also potentially paves the way for other sovereign and corporate issuers in the region to offer similarly structured products in the coming year.”
Another notable development was the use of the revised collective action clauses, recently published by the International Capital Market Association, with Mr Wong predicting that “there will be a wide acceptance for the provisions in the model CAC for Asian sovereigns”.
The Linklaters team was led by Capital Markets partner Kevin Wong and U.S. Capital Markets partner Pam Shores alongside Counsels Phill Hall and Xavier Amadei. Linklaters has led on a number of market firsts in Islamic Finance including advising the Luxembourg Government of a €200 million sukuk last year, the first euro-denominated non-Islamic sovereign sukuk, and the UK Government’s issuance of the first ever sukuk outside the Muslim world and the first sovereign sukuk to be issued by a European government.