Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Malaysia Said to Be Selling $1 Billion of Global Islamic Bonds

Malaysia is seeking to raise about $1 billion from its first sale of global Islamic bonds in eight years after pledges from Middle Eastern investors and a stocks rally helped revive the deal, according to people familiar with the fund-raising.

Latest guidance suggested the five-year sukuk will be priced to yield some 190 basis points more than similar-maturity U.S. Treasuries, the people said, asking not to be identified. U.S. five-year notes yielded 2.11 percent. A decision on the timing and size of the bond was delayed yesterday as concern about Europe’s debt crisis and tension on the Korean peninsula deterred investment in the region’s assets.

Malaysia is turning to overseas bond investors for the first time since 2002 as the government aims to increase development spending and boost economic growth. The nation has the world’s biggest market for Islamic bonds, accounting for 65 percent of outstanding sukuk in 2009, according to CIMB Group Holdings Bhd., one of the lead arrangers for the latest sale.

“Malaysia is oil-rich, the fundamentals are solid and they don’t have funding needs other than to set a benchmark in the fixed-income market,” said Paul Chan, Hong Kong-based chief investment officer at Invesco Asia Ltd. “There will be scarcity value in Malaysia’s dollar bonds. Asian countries are generally under-rated” given what’s happening in Europe, he said.

Petronas Spread

The sukuk were assigned debt ratings of A- by Standard & Poor’s and A3 from Moody’s Investors Service last week, the two company’s fourth-lowest investment grades. Greece, which sparked the European debt crisis amid concern about its ability to repay investors, has a junk, or high-risk grading of BB+ from S&P.

The MSCI Emerging Markets Index of stocks rose 1 percent, after climbing 3.2 percent yesterday. The premium investors demand to hold bonds in developing nations over Treasuries narrowed 18 basis points to 337 basis points, from an eight-month high of 355 basis points on May 25, according to JPMorgan Chase & Co.’s EMBI+ Index.

Malaysia’s state-owned Petroliam Nasional Bhd.’s 4.25 percent Islamic bonds due August 2014 yielded 3.92 percent, according to Royal Bank of Scotland Group Plc, or 207 basis points more than similar-maturity Treasuries. A basis point is 0.01 percentage point.

Second Finance Minister Ahmad Husni Hanadzlah declined to comment on the bond sale this morning as did CIMB Group’s Chief Executive Officer Nazir Razak. HSBC Holdings Plc and Barclays Capital are the other lead managers for the notes, which are due to be priced today in New York.

“The global sukuk will set a new pricing benchmark not only for future sukuk issuances but also Malaysia’s conventional bond issues going forward,” Prime Minister Najib Razak said at a briefing in Kuala Lumpur on May 19.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.