- An IPRS is a widely accepted Islamic derivative product which is used to hedge profit rate risk.
KUALA LUMPUR (Oct 6): Maybank Islamic Bhd has recently executed a 10-year sustainability-linked Islamic Profit Rate Swap (IPRS) with Axis Real Estate Investment Trust (Axis-REIT).
An IPRS is a widely accepted Islamic derivative product which is used to hedge profit rate risk. It is an agreement to exchange profit rates between two parties and is implemented through the execution of a series of underlying contracts to trade certain commodities to ensure it is Shariah-compliant.
The IPRS embeds an environmental, social, and governance (ESG) key performance indicator and sustainability performance target (SPT) to capture Axis-REIT’s broad aspirations across the ESG spectrum.
Achieving this SPT would trigger a profit rate discount for Axis-REIT.
Maybank Islamic chief executive officer Datuk Mohamed Rafique Merican said the sustainability-linked IPRS is expected to advance its commitment to support and shape sustainable business models.
“We are committed to supporting like-minded clients in structuring innovative solutions while playing our role to contribute to the broader ESG agenda,” he said in a statement today.
Meanwhile, Axis REIT Managers Bhd chief executive officer and executive director Leong Kit May said as the first Islamic real estate investment trust in Malaysia, Axis-REIT had always aimed to be at the forefront of adopting the industry’s best practices.
She said Axis-REIT had formally inaugurated sustainability reporting back in 2016 and has stepped forward to increase emphasis on sustainability across their operations.