Inaugural Issuance of RM4.5-Billion Domestic Sustainability MGII Sukuk by The Government of Malaysia

Strong demand reflects investors’ confidence in the country’s resilient economic performance and leadership in Islamic finance

Despite rising uncertainties over the global economic outlook, the Government of Malaysia remains resolute in its commitment to the sustainability agenda. Leveraging on the successful landmark issuance of the U.S. Dollar Sustainability Sukuk in April 2021, the Government of Malaysia successfully tapped into the domestic market with an inaugural issuance of Sustainability Malaysian Government Investment Issues (“Sustainability MGII”) of RM4.5 billion in nominal value.

The strong demand was evidenced by the Sustainability MGII’s oversubscription of 2.38 times and was successfully priced at a profit rate of 4.662%. The total incoming bid of MYR10.7 billion was the largest since July 2019 for a long duration (≥15 years) MGS/MGII auction. The keen interest demonstrates investors' vote of confidence in Malaysia’s strong economic fundamentals and growth outlook for 2022.

The issuance proceeds will be utilised to finance or refinance eligible social and green projects, as defined in the Government of Malaysia’s SDG Sukuk Framework, similar to the U.S. Dollar Sustainability Sukuk issued in 2021. The issuance will enable Malaysia to not only meet its commitments as a responsible nation and signatory to the Paris Agreement, but also further its efforts to advance its people’s socio-economic well-being. The issuance is also a testament to the Government’s efforts in advancing climate action as well as accelerating the transition towards achieving a prosperous, inclusive and sustainable nation, in line with the Twelfth Malaysia Plan, 2021 – 2025.

The Government would like to thank all investors who have clearly shown their confidence in the MGII Lestari Sukuk issue, which has been oversubscribed. The investors' confidence and recognition are not only in Malaysia's economic fundamentals and strong growth prospects, but also in the country's economic resilience. This issuance also showcases the Malaysian Islamic finance industry’s innovative capability and global leadership in Sukuk structuring, and in advancing SDG-focused policies to enable everyone in Keluarga Malaysia to prosper together.

The issuance attracted a diverse group of investors, with the allocation distributed among local financial institutions (50.3%), institutional investors (38.4%), insurance companies (7.2%) and foreign investors (4.1%). The new Sustainability MGII is expected to further entice demand from real-money investors, particularly those who are looking to formulate a sustainability portfolio.

As the first domestic sustainability MGII issuance, this issuance serves as a new benchmark, and showcases Malaysia’s global leadership in Islamic finance, reinforcing its position as the world’s largest Sukuk market.

YB Senator Tengku Datuk Seri Utama Zafrul Tengku Abdul Aziz
Minister of Finance
Putrajaya
30 September 2022