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Best Islamic project finance deal:
DanaInfra M$300 million exchange-traded sukuk
Sole adviser: CIMB
Lead managers: AmBank, CIMB, Maybank, RHB Capital
DanaInfra is the fundraising vehicle behind Malaysia’s national infrastructure projects, owned by the ministry of finance. In particular, it is responsible for the funding of the mass rapid transit project in Malaysia’s Klang Valley, a key infrastructure initiative for the country.
The financing for a large part of that was a M$8 billion Islamic syndicated revolving credit facility, but it’s a particular part of the financing we reward here. DanaInfra launched a M$300 million 10-year exchange-traded sukuk, and in doing so created a whole new asset class for retail investors. They were issued in February alongside M$1.2 billion of sukuk for institutional investors in more traditional OTC form.
The process of getting the deal together, spearheaded by CIMB, was complicated. Since this was a new listed asset class, it involved Bursa Malaysia, the central bank and the Securities Commission, not just for regulatory approval, but to create a whole framework for this and future similar issues. It also required a solicitation exercise to all existing DanaInfra sukuk holders to amend the terms of the Islamic commercial paper and MTN programme under which the new deal was launched. Investor education was required, and a grass-roots marketing campaign, while secondary market commitment was required after the launch. You wouldn’t say it flew out the door – the number of retail subscriptions ran into the thousands, not the tens of thousands – but the implications for infrastructure funding through retail are potentially considerable.
