UOB Malaysia successfully prices and places out EXSIM’s issuance of four-year RM323 million Islamic Medium Term Notes
The second tranche of EXSIM’s RM2 billion Sukuk Musharakah Programme monetises future earnings of two sustainable residential developments in Klang Valley
Kuala Lumpur, Malaysia, 2 August 2021 – UOB Malaysia today announced that it has successfully priced and placed out the issuance of four-year RM323 million Islamic Medium Term Notes (IMTN) by EXSIM Group (EXSIM) at a fixed profit rate of 4.5 per cent per annum. This issuance is the second tranche of EXSIM’s RM2 billion Sukuk Musharakah Programme that monetises future earnings of two sustainable residential developments in the Klang Valley.
UOB Malaysia is the Lead Arranger and Lead Manager of the IMTN issuance, which received a AA3/Stable rating by RAM Rating Services Bhd. Despite the challenging business environment impacted by the COVID-19 pandemic, the IMTN offering saw strong demand and was fully subscribed by quality institutional investors, including insurance companies, asset management companies, banks and private banks.
The Sukuk Musharakah Programme, established in 2019, was structured by NewParadigm Capital Markets Sdn Bhd1, through a special-purpose vehicle, EXSIM Capital Resources Berhad. Under the Programme, the IMTN issuance is also supported by RM80 million Islamic Commercial Papers, fully underwritten by UOB Malaysia to meet the IMTN’s liquidity requirement.
Ms Ng Wei Wei, Deputy Chief Executive Officer, UOB Malaysia, said, “We are pleased to have deepened our relationship with EXSIM, as the Company has once again placed its confidence in the Bank’s Islamic capital markets and sustainable financing capabilities. The successful pricing and placement of the IMTN is testament to our deep understanding of the country’s real estate sector and our capabilities to arrange a deal that monetises future earnings of residential real estate assets that are green and sustainable.
"At UOB Malaysia, we are committed to helping our clients drive their environmental, social and governance agenda as they meet their investors’ call for companies with sustainable business models and practices. In 2019, we developed the UOB Real Estate Sustainable Finance Framework specifically for clients that own or manage real estate assets that are sustainable. The financing framework sets out the eligibility criteria, including sustainability strategy, objectives, ratings and performance targets, for companies to meet when applying for green loans or sustainability-linked financing. It also guides us as we provide a range of conventional and Islamic banking solutions to forge a sustainable future with our clients."
EXSIM’s residential developments committed to attain GreenRE’s Gold Ratings
The IMTN issuance will be secured against and backed by the executed sales and purchase agreements of EXSIM’s two residential development projects – D’Quince Residences and D’Vervain Residences2. These property developments, once completed, are expected to attain Gold Rating certifications from GreenRE3. GreenRE's standards and certification process are in line with the United Nations Sustainable Development Goals and World Green Building Council’s commitment towards developing buildings that produce as much (or more) energy than they consume or aim to achieve a net zero future4.
Mr Lim Aik Hoe, Managing Director, EXSIM, said, “We are proud that we have developed both projects to comply with the sustainable criteria set by GreenRE. These two projects will incorporate sustainable features which include solar panels, energy-efficient lightings and air cooling systems, as well as the recycling of rainwater and waste into compost to fertilise the greenery in the buildings’ compounds.
“Our successful IMTN issuance will provide us with liquidity for future development projects for EXSIM to achieve our next level of growth. With the support from UOB Malaysia, this transaction, which is part of an innovative Sukuk Programme, will help EXSIM to sustain the capital expenditure and working capital requirements of our new and existing real estate development projects. This will also enable us to deliver more value to our stakeholders.”
Last year, UOB Malaysia also supported EXSIM’s Sukuk Programmes totalling RM3 billion, secured against the future earnings of the Company’s commercial real estate development, Scarletz Suites in Kuala Lumpur5. Established in 2008, EXSIM specialises in developing high-end residential, commercial and industrial real estate projects within the Klang Valley. To date, EXSIM has officially launched 28 developments with a total gross development value of RM12 billion and an another RM18 billion in the pipeline.
1 NewParadigm Capital Markets is an independent corporate finance advisory firm licensed by Securities Commission Malaysia. It is focused on providing financial advice on mergers and acquisitions, restructuring exercises, capital raising and strategic advisory.
2 D’Quince Residences and D’Vervain Residences are EXSIM’s residential property developments located at Damansara Perdana Selangor, which comprise more than 2,000 residential units.
3 GreenRE (Green Real Estate) was set up by the Real Estate Housing Development Authority in 2013 to drive sustainability in Malaysia’s real estate industry. GreenRE is fully supported and recognised by the Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC), Malaysia.
4 For more information, please visit World Green Building Council at www.worldgbc.org
5 Please see UOB Malaysia news release: UOB Malaysia and Danajamin to support EXSIM’s landmark Sukuk Programmes totalling RM3 billion, 25 February 2020.