EXSIM ISSUES RM3B SUKUK
Programme aimed at monetising progress billings involving multiple development projects
EXSIM Development Group (EDG) has established its first landmark RM3 billion financial programme, comprising RM2 billion Sukuk Musharakah IMTN Programme (IMTN Programme) and a RM1 billion Sukuk Murabahah ICP Programme (ICP Programme) through a special purpose financial vehicle, Exsim Capital Resources Bhd (ECRB).
On January 30, EDG issued real estate unbilled sales-backed sukuk facility, the first structured transaction in Malaysia, to monetise progress billings involving multiple development projects, allowing the company to efficiently manage its project development cash flow.
ECRB floated the first tranche of its RM2 billion 10-year IMTN Programme that will monetise unbilled sales for executed property transactions.
Under this programme, EDG and its group of companies will sell their beneficial interest under development projects.
The future progress billings with regard to the relevant development projects will be used to fund the remaining construction costs and meet the issuer’s fees, expenses and obligations under each facility.
EDG’s offering won an investment grade rating of “AA3/Stable” from RAM Ratings Services Bhd, and Danajamin Nasional Bhd has agreed to guarantee the liquidity support for the Tranche 1 Sukuk Musharakah.
For this first tranche issuance, the projects to be securitised under the financing programme are the Nidoz Residences and D’Nuri Residences projects in Desa Petaling, Kuala Lumpur. Both projects have obtained an “AA3/stable” rating from RAM Rating.
The RM290 million Tranche 1 IMTN is secured against 1,862 sales and purchase agreements for its Nidoz Residences and D’Nuri Residences projects.
The unrated Tranche 1 ICP of up to RM130 million, which is meant to underwrite construction of Nidoz Residences and D’Nuri Residences developments and liquidity risk of Tranche 1, is guaranteed by Danajamin and fully underwritten by United Overseas Bank (Malaysia) Bhd.
Although Exsim is a privatelyheld property developer and a first time issuer in the Malaysian sukuk capital market, the Tranche 1 IMTN was fully subscribed for.
“RAM Ratings had applied a rigorous and extensive credit rating process to the Nidoz Residences and D’Nuri Residences projects to ensure institutional investors’ credit interest was mitigated and protected at all times.
“The credit rating accorded to the Tranche 1 IMTN is a reflection of EDG’s efficient management execution, strong performance capability, a high percentage of lock-in sales, backed by end-financing and historical track record of completing projects on time and well within budget,” said Exsim Development Sdn Bhd managing director Lim Aik Hoe.
The sukuk structure is developed, arranged and advised by NewParadigm Capital Markets Sdn Bhd (NCM), a corporate finance advisory firm licensed by the Securities Commission.
NCM managing director Charanjeev Singh said: “This sukuk is the world’s first syariah-compliant structured transaction to monetise progress billings involving multiple projects.
Meanwhile, its executive director Danny Kwan said: “NCM is at the forefront of innovation in Malaysian capital markets, particularly in Islamic financing, having structured landmark sukuk transactions.
“The issuance demonstrates our continued commitment to persistently raise the bar in advancing the Malaysian capital markets and to promote Malaysia as an Islamic finance hub.”