UPDATE 2-Malaysian toll expressway firm to sell $9.7 bln sukuk

Sun Jan 8, 2012 11:42pm EST

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KUALA LUMPUR Jan 9 (Reuters) - Malaysia's biggest toll expressway company said it will issue $9.7 billion in Islamic bonds in what would be the world's largest sukuk offering.

The 30.6 billion ringgit sukuk from Projek Lebuhraya Usahasama Berhad, or PLUS Berhad, is scheduled for Jan. 12. It follows the privatisation of PLUS Expressways Berhad, one of Malaysia's largest privatisations.

Proceeds from the bond will be used in part to finance the purchase of five toll concessions, and also for working capital and general funding requirements, the company said in a statement dated Jan. 8.

The sukuk repayment period ranges from five years to 27 years, and the weighted average yield is about 5 percent.

CIMB Investment Bank was the deal's financial adviser, sole principal adviser, sole lead arranger and joint lead manager. AmInvestment Bank, Maybank and RHB Investment Bank were the other joint lead managers.

A source said the bonds would be placed out to the four banks.

The company said the sukuk was rated AAA by the Malaysian Rating Corporation Board, or MARC.

Shareholders of PLUS Expressways approved a takeover bid last year from Malaysia's UEM Group Bhd and the Employees Provident Fund. UEM Group is an investment holding company wholly owned by Malaysian investment arm Khazanah Nasional .

"The successful issuance and strong demand for our sukuk demonstrates the depth and liquidity of the local market," UEM Group chief executive officer Izzaddin Idris said.

Globally, Islamic bond issuance rose to $23.3 billion last year, from $13.9 billion in 2010, according to Thomson Reuters data.

Indonesia and Saudi Arabia are among sovereign issuers that are planning sukuk offerings in early 2012.

But the Turkish unit of Bahrain's Albaraka Banking Group said in December it had postponed a planned issue of Islamic bonds, citing unfavourable yields. (Reporting by Anuradha Raghu and Emily Kaiser; Editing by Kim Coghill)

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