Wednesday, June 13, 2012

PTPTN raises RM2.5b through Islamic bond sale

Malaysia’s National Higher Education Corporation (PTPTN) has sold RM2.5 billion of government-guaranteed Islamic debt, reported Bloomberg today, as it looks for financing to provide more loans to a growing number of eligible students entering university.

The financial newswire said that the 10-year fixed income securities was privately placed and offered a yield of 3.83 per cent.

PTPTN has been mired in controversy recently when the opposition Pakatan Rakyat (PR) leaders called for its abolition in favour of free education while the ruling Barisan Nasional (BN) government insists students must repay the loans. There is an outstanding RM6.75 billion from the RM43.6 billion in loans given out since 1996.

The sukuk is seen as a way to provide further financing and realise Malaysia’s aspiration to be the leader in Islamic finance and many government-linked corporations are pushed to issue Islamic debt to help grow the sukuk market.

Loss-making national carrier Malaysia Airlines issued the world’s first perpetual Islamic bond yesterday worth RM2.5 billion. Its first tranche of RM1 billion was fully subscribed by civil service pension fund KWAP.

Malaysia accounted for about 68 per cent of the global sukuk issuance of US$84 billion last year.

Maybank Investment Bank chief executive Tengku Datuk Zafrul Tengku Aziz said yesterday that the total global sukuk issuance is expected to exceed US$120 billion this year.

Malaysia accounted for 71 per cent of the US$43.5 billion in sukuk issuance in the first quarter of this year.

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