In a tough year for the Malaysian bond market, CIMB brought a diverse array of offerings to investors, keeping them engaged and ensuring it stayed one step ahead of the competition.
After reorganising its team to encourage more integration across product groups, CIMB’s focus on finding solutions for its clients in 2015 resulted in groundbreaking transactions and another strong performance in the league tables.
Having introduced overseas Tier 2 capital to the Malaysian market with a Basel III-compliant offering of M$400m (US$91m) for subsidiary CIMB Thai in 2014, CIMB took the concept to Krungthai Bank and won a trophy mandate as sole lead manager and principal adviser on the first Basel III-compliant offering of subordinated debt in Malaysia from a foreign-owned bank. The M$1bn T2 offering allowed Krungthai to make considerable savings, compared with baht funding and provided some welcome variety for Malaysian investors.
CIMB showed it was the bank of choice for foreign issuers, when it also led a sukuk bond offering of M$300m from Istanbul-headquartered Kuyvet Turk Katilim Bankasi on its debut in the ringgit market.
In addition, CIMB was sole lead on Malaysia’s first socially responsible sukuk, a M$100m trade for Ihsan Sukuk with a guarantee from Khazanah Nasional. The offering opened up a new asset class for Malaysia and required extensive explanation to investors, many of whom were not traditional sukuk buyers, but were buying under their corporate social responsibility initiatives. Proceeds from the sukuk will be used to transform schools, and bondholders can track the scheme’s progress against performance indicators.
CIMB played a part in all of the major perpetual hybrid trades during the review period. Chief among these were the first rated perpetual sukuk bonds from Malaysia Airports, as well as Malaysia’s inaugural Single A rated perp sukuk from repeat issuer DRB-HICOM. MAHB’s M$1bn trade helped it maintain its AAA domestic rating from RAM, while being eligible for equity treatment under local accounting rules, and gave investors a chance to diversify and book enhanced returns.
Choppy markets proved no barrier to success, with CIMB helping Genting Malaysia print M$2.4bn in its debut medium-term notes during rough market conditions in August, even increasing the size of the issue from the original target.
The bank was also present on the country’s benchmark offshore transactions, with bookrunner roles on Malaysia’s US$1.5bn dual-tranche sukuk, which included the longest sukuk on record from a sovereign, and Petronas’ US$5bn bond-and-sukuk offering in the largest G3 trade in South-East Asia to date.
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