RAM Ratings involved in numerous M’sian ‘firsts’, landmark-issues

KUALA LUMPUR: Against the backdrop of Malaysia’s flourishing debt market, RAM Ratings has had the distinction of having rated numerous landmark deals.

Several RAM-rated foreign issuers made their debut in the ringgit bond market in 2014, including the first European entity. Another newcomer was CIMB Thai Bank Public Company Limited, with its RM2 billion Tier-2 Subordinated Debt Programme.

“CIMB Thai is the first Thai entity to issue capital securities in Malaysia. RAM is pleased to play a part in this positive development in ASEAN crossborder funding – a key initiative of the Asean Economic Community,” said Foo Su Yin, chief executive officer (CEO) of RAM Ratings.

RAM’s dominance in rating sukuk transactions is also highlighted by its rating of Bank of Tokyo-Mitsubishi UFJ Bhd’s US$500 million Multi-Currency Sukuk Wakalah Bi Al-Istithmar Programme which issued the first Basel III-compliant sukuk i n Malaysia, valued at RM3 billion.

Based on data from Bank Negara Malaysia (BNM), gross PDS issuance i n Malaysia amounted to RM85.5 billion in 2014.

This was 1.9 per cent higher than the previous year’s RM83.9 billion, despite higher financing costs following BNM decision to raise the Overnight Policy Rate by 25 basis points in July 2014.

Financial institutions (FIs) played a major role in boosting the domestic market last year, accounting for 59 per cent of total PDS issuance.

There was significant capital raising by FIs, including Malayan Banking Bhd’s up to RM10 billion Additional Tier-1 Capital Securities Programme – the first Basel III AT1 programme set up in Malaysia, as well as subordinated debt programmes established by several other FIs.

“Moving forward, we expect RM85 billion to RM95 billion of gross issuance in 2015, mainly supported by financing for infrastructure projects and further capital-raising efforts by FIs.”

RAM’s league tables for sukuk and conventional PDS in 2014 are dominated by Malaysia’s 2 banking giants - Maybank Investment Bank (MIB) and CIMB Investment Bank (CIMB IB).

MIB emerged in the top spot after having arranged close to RM25 billion or 33.6 per cent of the RM74.4 billion of RAMrated PDS and sukuk last year. Meanwhile, CIMB IB led the pack in terms of the largest number of PDS and sukuk issues arranged.

Although MIB took pole position as the arranger with the highest value of sukuk deals - about RM14.5 billion, it shared the spotlight with CIMB IB in terms of the highest number of sukuk transactions arranged.

In the meantime, Hong Leong Investment Bank Bhd was the newcomer among the top three names in RAM’s in league table on PDS and sukuk issues by programme value, after having arranged the RM10 billion Sub Bonds of its sister bank, Hong Leong Bank Bhd.