Exsim's third tranche of Islamic debt successfully priced by UOB
Kuala Lumpur, Malaysia, 31 Mar 2022 – UOB Malaysia today announced that it has successfully priced and placed out EXSIM’s issuance of four-year RM300 million Islamic Medium Term Notes (IMTN) at a fixed profit rate of 5.1 per cent per annum.
This issuance is the third tranche of EXSIM’s RM2 billion Sukuk Musharakah Programme (Sukuk Programme) that monetises the future earnings of the developer’s green residential development 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.
As the Malaysian property market has shown stronger signs of recovery in the first quarter of 20221, the IMTN issuance was well received by quality institutional investors, including insurance companies, asset management companies, banks and private banks.
Ms Ng Wei Wei, Deputy Chief Executive Officer, UOB Malaysia, says, “The Bank is committed to helping the company drive its environmental, social, and governance agenda of developing green and sustainable projects for homebuyers and transitioning the country into a carbon-neutral economy.
“Our support to EXSIM is part of the financing solutions we offer under the UOB Sustainable Finance Framework for Green Building Developers and Owners and the UOB Smart City Sustainable Finance Framework2. These frameworks were developed to help more Asian companies advance their businesses responsibly while reducing their carbon footprint.”
The Sukuk Programme was established in 2019 by NewParadigm Capital Markets Sdn Bhd3 through a special-purpose vehicle, EXSIM Capital Resources Bhd.
UOB IMTN issuance
Under the Programme, the IMTN issuance is also supported by RM75 million Islamic Commercial Papers, fully underwritten by UOB Malaysia to meet the IMTN’s liquidity requirement.
In addition, UOB Malaysia successfully priced and placed out EXSIM’s IMTN second tranche issuance under the Sukuk Programme4 in June 2021 to
monetise the Company’s future earnings of two other sustainable residential developments in the Klang Valley.
Ms Ng says, “The ability to conclude two sizeable IMTN issuances under the Sukuk Programme in less than 12 months clearly demonstrates UOB Malaysia’s capabilities in sustainable financing and the Islamic capital markets.
“We are heartened by the growing demand among investors for debt instruments relating to sustainable development, such as green buildings, as this will drive more companies to embed ESG considerations into their business practices.”
GreenRE’s Gold Ratings
The IMTN issuance will be secured against and backed by the executed sales and purchase agreements of EXSIM’s D’Erica Residences5. The property development, once completed, is expected to attain Gold Rating certifications from GreenRE6.
GreenRE’s standards and certification process are in line with the United Nations Sustainable Development Goals and the World Green Building Council’s commitment to developing buildings that produce as much (or more) energy than they consume or aim to achieve a net zero future7.
Mr Lim Aik Hoe, Managing Director, EXSIM, says, “The development of D’Erica Residences, our sixth project complies with the sustainability criteria set by GreenRE.
“Strategically located amid the lush surroundings of Klang Valley’s affluent suburbs, the project incorporates sustainable features including solar panels, rainwater recycling, energy-efficient power and air-cooling systems.
“UOB Malaysia’s issuance of the IMTN under the Sukuk Programme will help our Group deliver more value to our stakeholders in an environmentally-sustainable manner.”
Established in 2008, EXSIM specialises in developing high-end residential, commercial and industrial real estate projects within the Klang Valley.
To date, EXSIM has launched 29 developments with a total gross development value of RM12 billion, with another RM11.6 billion’s worth in the pipeline.