Maintaining momentum
Maybank Investment Bank kept track of investor demand in whippy financial markets to help issuers exploit brief windows to raise funds, and deepened the green market along the way.
“We dominated in many sectors from financial institutions and corporates to issuers from the state of Sarawak, and we were strong in all asset classes, especially in sustainability where we have become a major leader,” said Andrew Lim, Maybank’s regional head for debt capital markets.
“This year, we executed deals every month even amid key event risks, such as the widespread impact of US rate spikes and the Ukraine war which spurred uncertainties in the local market. Despite that, we were still able to help clients print deals and raise funds.”
Maybank nabbed the third-place spot in the Malaysian ringgit league tables for 2022, with M$24.8bn (US$5.63bn) in volume for a 18.0% market share. The top two banks earned credit from a jumbo restructuring.
Among the bank’s deals was a sole mandate from MBSB Bank, a major Malaysian Islamic bank owned by Malaysia Building Society, to bring the world’s first sustainability sukuk from an Islamic bank.
Maybank, as sole principal adviser, lead arranger, lead manager and sustainability structuring adviser, took MBSB Bank out amid volatile market conditions in early April. Maybank’s confidence in MBSB Bank’s strong credit story was borne out, and it drew strong demand for its five and seven-year sukuk with a 11x bid-to-cover ratio before the two tranches priced at 4.36% and 4.73%. Both yielded a spread of 95bp over Malaysian government securities – one of the tightest spreads in 2022 for a Single A credit in the local market.
The sustainability label gave the Islamic bank sukuk scarcity value, which helped drive momentum. The deal might have been small at a combined M$300m but it demonstrated that the ringgit bond market was open and encouraged further issuance.
Maybank also brought new issuers to the market, expanding the range of sectors available to investors. One of these was telecom tower owner Edotco Malaysia, which printed an inaugural four-tranche sukuk that was upsized to M$1.4bn from M$1bn on a cracking book that hit a peak of M$9.3bn. The width and depth of Maybank’s distribution network helped drive demand, which resulted in a 22bp compression in the wide ends of guidance.
Another standout was Sarawak Petchem’s M$4bn project financing sukuk sold in July, Malaysia’s largest greenfield project financing in the bond market since 2018.
Lim attributes the bank’s leadership on innovative deals to its ability to be perceptive and nimble. “We were very vigilant on market conditions, ensuring that our team tracked investors closely in terms of their liquidity, appetite and investment strategies,” he said.
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