KUALA LUMPUR (Oct 13): Permodalan Kelantan Bhd (PKB), a wholly owned subsidiary of Perbadanan Kemajuan Iktisad Negeri Kelantan (PKINK), has raised RM35 million through a social sukuk issuance to finance the expansion of its Islamic pawnbroking business.

Maybank Investment Bank Bhd acted as the sole principal adviser, lead arranger, lead manager, sustainability structuring adviser and facility agent for the issuance, while Maybank Islamic Bhd was the shariah adviser and sole subscriber.  

The issuance, undertaken under its RM300 million sukuk wakalah programme, is Malaysia's first social sukuk issued by a state agency, according to a joint statement by PKB and Maybank IB on Tuesday.

Proceeds from the latest issuance will be used to expand PKB's Ar-Rahn pawnbroking operations, including increasing its financing capacity and establishing new branches.

It follows PKB's issuance of RM265 million in sukuk in November last year, which marked the company's entry into the Islamic debt capital market.

The framework is aligned with the Securities Commission Malaysia's Sustainable and Responsible Investment Sukuk Framework, Asean Social Bond Standards and the International Capital Market Association's Social Bond Principles, according to the joint statement. 

“The issuance of this social sukuk not only provides PKB with an important source of financing but also serves as a catalyst for the expansion of the Ar-Rahn business and enhances PKB’s capacity to provide wider access to Islamic financial services for the community,” said PKB chairman Datuk Ahmad Yaakob.

Meanwhile, Maybank Investment Bank deputy chief executive officer Tengku Ariff Azhar Tengku Mohamed said the issuance would support financing access and business activities among underserved communities.

PKB began operating its Ar-Rahn business in March 1992 and currently operates 35 branches across Kelantan, Pahang, Selangor, Kuala Lumpur, Kedah, Perlis, Johor, Sabah and Sarawak.