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MIMB Investment Bank Berhad, a wholly-owned subsidiary of EON Bank Berhad, was recently appointed by LBS Bina Group Berhad, to arrange a RM135 million Sukuk Programme, to enable the Group to finance its housing development projects.
The Sukuk Programme is the first in Malaysia to be guaranteed by Danajamin Nasional Berhad, Malaysia's first financial guarantee insurer. “Danajamin’s participation in this exercise, by providing the Al-Kafalah Guarantee, will enhance the Sukuk Programme. The credit enhancement which comes with the financial guarantee makes sukuk financing a viable and cheaper financing option for LBS Bina,” said Michael Lor, EON Bank Group Chief Executive Officer.
The issue is rated AAA (fg) by the Malaysian Rating Corporation Berhad. Subscription for this new Sukuk is targeted by end of July 2010.
LBS Bina Group managing director, Dato’ Lim said, “The proceeds from RM135 million Sukuk Programme issuance will be utilised mainly for proposed development projects in Bandar Putera Indah in Batu Pahat, Johor; D’ Puchong in Puchong, Selangor; and Taman Royal Lily in Cameron Highlands, Pahang. The Group has a landbank of about 2,300 acres located in Malaysia and China, which may ensure the Group’s continuous operation for the next 10 to 15 years."
He added, "LBS Bina’s entrance into the large liquidity pool of the Malaysian Islamic capital market allows the Group to diversify its sources of funding whilst lowering the cost of financing. The cost saving will be passed on to the end consumer while the investors could enjoy the yield with peace of mind under the guarantee of Danajamin.”
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