KUALA LUMPUR (April 11): UOB Malaysia and HSBC Malaysia have successfully priced a four-year RM350 million Medium Term Notes (MTN) for Mercedes Benz Services Malaysia Sdn Bhd (MBSM), according to a joint statement by both banking groups.

In a Monday statement, the banking groups said the MTN issuance that fixed a coupon rate of 3.62% per annum and due in March 2026 was rated AAA(s) by RAM Rating Services Bhd.

"Despite the prevailing uncertain global market conditions, the MTN issuance managed to garner tight pricing and strong demand from institutional investors to become MBSM's largest issuance to date.

"This is a clear validation of investors' confidence in MBSM's strong credit and proactive liquidity management.

"Amid the current low interest rate environment, UOB Malaysia will continue to support our clients to tap the debt capital market to meet their liquidity needs and optimise their financing structure," according to UOB Malaysia deputy chief executive officer Ng Wei Wei.

The statement noted that the MTN issuance has a subscription rate of 4.76 times, subsequent to its upsized issue amount from the initial RM250 million.

Meanwhile, HSBC Malaysia country head of global banking, Christina Cheah, said the transaction was completed amid current elevated market volatilities and is testament to investors' confidence in the Mercedes Benz Group.

"The success of the transaction reinforces that domestic liquidity still remains for quality issuers," she said.

MBSM chief financial officer Philipp Zuehlke said both banks have demonstrated their deep understanding of the automotive industry.

"We look forward to advancing our business by leveraging on their strong domestic market expertise in Malaysia," Zuehlke added.

The statement noted that this is MBSM's sixth MTN transaction and part of its RM3 billion debt offering programme, which was launched in May 2018.