First tranche of Mah Sing issuance oversubscribed

PETALING JAYA: Mah Sing Group Bhd’s first tranche of RM650mil under its RM1bil debt note programme has been oversubscribed.

The property developer said in a statement that the first issuance amounting to RM650mil in nominal value to be issued out of the perpetual securities programme, is expected to take place by end of this month (proposed issuance).

The proposed issuance, which is perpetual in nature with a first call option date at the end of year five from issuance, will carry a semi-annual fixed rate coupon of 6.90% per annum for the first five years.

The proceeds from the issuance was earmarked to expedite construction for projects with good take-up, landbanking and working capital, said Mah Sing.

The group expected final stage billings on delivery of vacant possession of properties amounting to about RM607mil to take place in 2017. This would enhance its cash position.

Last Friday, the property developer entered into agreements to set up a senior perpetual securities issuance programme of up to RM1bil with CIMB Investment Bank Bhd.

The banking group is the sole principal adviser, lead arranger and lead manager for the debt note programme and proposed issuance.

“We are pleased with the response to our proposed issuance that attracted mainly institutional investors as well as selected private wealth and banking customers. This shows the confidence they have in us,” said group managing director Tan Sri Leong Hoy Kum.

He noted that Mah Sing was a developer with growth in mind and in terms of fund raising or financing options, it was guided by capital management policy of not exceeding 0.5 times in net gearing.

“We are also constantly exploring various options in balancing the interests of all stakeholders,” said Leong, adding that the programme was part of Mah Sing’s prudent financial management to achieve better balance between long-term and short-term financing, as well as fixed rate versus floating rate financing.

Mah Sing charted strong growth with industry-leading asset turnover ratio of 49% on average for the past five years.

It also achieved return on equity of 14% on average during the same period, compared to peer average of 9% to 10%.