KUALA LUMPUR (June 24): United Overseas Bank (Malaysia) Bhd (UOB Malaysia) has successfully priced its RM750 million sukuk, which falls under its existing RM5 billion Sukuk Wakalah Programme.

In a statement, UOB Malaysia said issuance of the Basel III-compliant Tier 2 subordinated Islamic medium-term notes (Tier 2 Sukuk Wakalah) was priced on June 19, with a profit rate fixed at 3.85% per annum. This rate represents a spread of 36 basis points above the seven-year benchmark Malaysian Government Securities (MGS).

The sukuk, which has been rated AA1 by RAM Ratings, is scheduled for issuance on July 3, 2025. It will mature on July 3, 2037, with an optional redemption date on July 2, 2032.

Initially aimed to raise RM500 million, the Tier 2 Sukuk Wakalah was eventually upsized to RM750 million due to robust demand. The strong interest came from a diverse group of over 20 high-quality investors, including insurance companies, fund managers, government-linked investment companies, banks and private banks, said UOB Malaysia.

UOB Malaysia's chief executive officer Ng Wei Wei said "the upsized issuance reflects continued confidence in UOB Malaysia’s credit strength and long-term strategic direction".

"It also reflects the depth and maturity of Malaysia’s Islamic debt capital market, which continues to attract a diverse and high-quality investor base. This outcome affirms both the resilience of Malaysia’s financial system and the enduring strength of the country’s strong economic fundamentals," she added.

UOB Malaysia and CIMB Investment Bank served as joint lead managers for this transaction.