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KUALA LUMPUR (Feb 25): EXSIM Group has established a RM2 billion Islamic Medium-Term Note (IMTN) programme and a RM1 billion Islamic Commercial Papers (ICP) programme.
The property developer said the two programmes will be used to refinance existing borrowings, as well as to purchase new land and refinance working capital requirements.
The IMTN programme is the first sukuk structure in Malaysia to monetise the future sales earnings of a commercial real estate development project — with each tranche under the programme secured against a specific commercial development project.
The first tranche under the IMTN programme will be backed by executed sales and purchase agreements of Scarletz Suites @ KL City Centre located on Lorong Yap Kwan Seng here.
United Overseas Bank (M) Bhd (UOB Malaysia) is the principal adviser and lead manager of the two programmes, while Danajamin Nasional Bhd will provide guarantees for the standby working capital and liquidity facilities for the first tranche of the programmes.
The official signing ceremony involving the three parties was held here today. This marks the second Islamic debt capital market transaction UOB Malaysia and Danajamin have worked on with EXSIM.
The two programmes are structured by NewParadigm Capital Markets Sdn Bhd, and will be established through a special-purpose vehicle, EXSIM Ventures Bhd.
The first tranche of the IMTN programme carries a AA3/Stable rating from RAM Ratings Services Bhd, while the ICP programme is unrated.
Speaking to reporters after the signing, NewParadigm managing director Charanjeev Singh said the two programmes complemented each other.
“The IMTN allows them to monetise their future progress billings upfront. The ICP facilities function to support the project. You have got to make sure the project is completed on time, so the ICP is a buffer,” he said.
Charanjeev added that the IMTN tranches will be tied back to the projects identified in the specific tranches.
EXSIM managing director Lim Aik Hoe said the property group is targeting 30% sales growth this year, from the approximately RM1.5 billion in sales registered in 2019.
He added that the group is looking to expand its footprint into Penang, Ipoh and Johor.
“The sukuk programmes will help EXSIM achieve our next level of growth and provide us with liquidity for future development projects. With the support of UOB Malaysia and our partners, this innovative structure will enable EXSIM to deliver more value to tie stakeholders and help us to finance the capital expenditure and working capital requirements of our new and existing commercial real estate development projects,” said Lim.
To date EXSIM has launched 21 developments with a gross development value of RM8 billion with another RM18 billion in the pipeline.
All 604 units at Scarletz Suites have been taken up and will be delivered to owners in the third quarter of 2021, Lim said.
Click here to see condominiums for sale at Jalan Yap Kwan Seng, Kuala Lumpur.
