Prasarana raises RM2b from sukuk

Published: 2009/09/12

SYARIKAT Prasarana Negara Bhd, the state-owned public transport operator, has raised RM2 billion from an Islamic bond sale, which saw strong demand from investors.

Bond investors offered RM6.6 billion to Prasarana, reflecting the strong demand for the papers, which were guaranteed by the federal government.

"The over-subscription of this issue demonstrates strong investor appetite and ample liquidity in the market for high grade papers," said Prasarana chairman Tan Sri Izzudin Dali in a statement yesterday.

Prasarana did not say what the money was for but it has been reported that the group plans to extend its light rail transit (LRT) lines in Kuala Lumpur.

This is the second time that Prasarana, parent for RapidKL, RapidPenang and KL Star Rail, has raised funds from an Islamic bond sale.

The RM2 billion issue matures in 15 and 20 years. The 15-year tranche of RM500 million carries a semi-annual profit rate of 4.85 per cent per year, while the 20-year portion of RM1.5 billion has a rate of 5.07 per cent.

Investors who participated in the deal included insurance companies, fund managers and financial institutions, Prasarana said.

The sukuk issue was based on the Syariah principle of Ijarah which entails a sale and leaseback of Prasarana's assets.

During the tenure of the sukuk, Prasarana will pay rentals to the investors and upon maturity, the company will buy the assets back.

CIMB Investment Bank Bhd and Maybank Investment Bank Bhd are the joint lead arrangers and managers for the sukuk issue.

Prasarana was set up as part of an effort to revamp the public transport system in Kuala Lumpur and its surrounding areas