Malaysia Airports issues M$500m sukuk

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Malaysia Airports Holdings Berhad (MAHB) has issued ringgit (M$) 500 million ($151 million) of Islamic bonds, or sukuk, which will partly go towards financing its M$4 billion new terminal at Kuala Lumpur International Airport.

The sukuk, was issued in two tranches on 6 September, comprising a three-year M$250 million tranche and a five-year M$250 million tranche at a yield of 3.9% and 4.2% respectively.

The sukuk, which were 3.4 times oversubscribed, was taken up by a diverse group of investors including government agencies, financial institutions, asset management companies and insurance firms, says MAHB.

Proceeds from the bond issue will partly go towards financing the development of the KLIA2 project. It will also be used as working capital and for general investments.

To date, MAHB has raised M$3.1 billion from its inaugural sukuk programme set up in 2010 for the purpose of financing the KLIA2. The much delayed KLIA2, which has doubled in cost, is expected to be operational on 2 May 2014.