EXSIM has established the first Islamic Medium-Term Note Programme in Malaysia to be secured against the future earnings of a commercial real estate development.
KUALA LUMPUR, 25 February 2020 – EXSIM Group (EXSIM) has established a RM2 billion Islamic Medium-Term Note Programme (IMTN Programme) and a RM1 billion Islamic Commercial Papers Programme (ICP Programme) to refinance its existing borrowings, to purchase new land and to help finance its working capital requirements. United Overseas Bank (Malaysia) Bhd (UOB Malaysia) is the Principal Adviser, Lead Arranger and Lead Manager of the Sukuk Programmes while Danajamin Nasional Berhad (Danajamin) will provide the guarantee. The two Sukuk Programmes, which are structured by New Paradigm Capital Markets Sdn Bhd1, will be established through a special-purpose vehicle, EXSIM Ventures Berhad (EXSIM Ventures).
The IMTN Programme is the first Sukuk structure in Malaysia to monetise the future sales earnings of a commercial real estate development project. Each tranche under the IMTN programme will be secured against a specific commercial development project, with the first tranche backed by the executed sales and purchase agreements of Scarletz Suites2. Scarletz Suites is EXSIM’s second commercial property development in the centre of Kuala Lumpur.
The first tranche of the IMTN Programme will carry a credit rating of AA3 by RAM Ratings Services Berhad. The ICP Programme, which is unrated, will have its first tranche guaranteed by Malaysian financial guarantee insurer, Danajamin, and will be fully underwritten by UOB Malaysia.
Mr Lim Aik Hoe, Managing Director, EXSIM, said, "The Sukuk Programmes will help EXSIM achieve our next level of growth and provide us with liquidity for future development projects. With the support of UOB Malaysia and our partners, this innovative structure will enable EXSIM to deliver more value to its shareholders and help us to finance the capital expenditure and working capital requirements of our new and existing commercial real estate development projects."
The RM3 billion Sukuk Programmes mark EXSIM’s second Islamic debt capital market transaction arranged by UOB Malaysia. EXSIM issued its first Sukuk Programme through the Bank in January 2019 to monetise its residential real estate earnings.
Ms Ng Wei Wei, Managing Director and Country Head of Wholesale Banking, UOB Malaysia, said, "We are honoured that EXSIM has once again placed its confidence in UOB Malaysia’s Islamic capital markets capabilities. This confidence is also testament of our deep understanding of the real estate sector and our capabilities to arrange a first-of-its-kind Sukuk programme to monetise the future earnings of a commercial real estate asset. UOB Malaysia has lead-arranged a number of significant Islamic debt transactions via our Investment Banking platform to help our clients’ achieve their strategic goals. Providing our clients with a comprehensive range of banking solutions, through both our conventional and Islamic solutions, is integral to building long-term relationships with our clients and meeting their differentiated needs."
Commenting on the landmark transaction, Mohamed Nazri Omar, Chief Executive Officer of Danajamin said, "EXSIM is recognised in the market for its timely development, completion and delivery of real estate projects, as well as consistently demonstrating take-up rates of more than 90 per cent for their projects. We also commend EXSIM’s commitment as a socially responsible developer with its emphasis on innovative green features, with six of its recent developments being certified under the Green Building Index (GBI). It is our mandate to support growth of mid-size companies in a sustainable manner. At the same time, we hope to encourage our clients to make environmental awareness one of their top priorities. In achieving our mandate, we are also delighted to partner UOB Malaysia and New Paradigm Capital Markets for this innovative transaction."
EXSIM, established in 2008, specialises in developing high-end residential, commercial and industrial real estate projects within the Klang Valley. To date, the Company has launched completed 21 developments with a total gross development value of RM8 billion and an additional RM18 billion in the pipeline.
1 NewParadigm Capital Markets is an independent corporate finance advisory firm focused on providing financial advice on mergers & acquisitions, restructuring exercises, capital raisings and strategic advisory.
2 Scarletz Suites @ KL City Centre is EXSIM’s second commercial property development. It is located at Lorong Yap Kwan Seng in Kuala Lumpur, comprising 604 units of office suites.