MAS issues M$500m Sukuk second tranche

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Malaysian Airline System (MAS) has issued the second tranche of the perpetual junior Sukuk programme amounting to M$500 million ($162.5 million).

The junior Sukuk was issued at par and carries a semi-annual profit rate of 6.9% per annum up to year 10. It is redeemable at Malaysia Airlines' option after 10 years, and on every distribution date thereafter. If MAS does not exercise its option to redeem at the end of the 10th year, the periodic distribution increases by 2.5%.

In May this year, MAS received approval from the securities commission for the establishment of the M$2.5 billion perpetual junior sukuk programme arranged by Maybank Investment Bank.

The M$1 billion first tranche was fully subscribed by government-owned Kumpulan Wang Persaraan (Diperbadankan) in June.

The proceeds raised from this issuance will be utilised for MAS' working capital requirements and refinancing of existing borrowings.