Best sukuk deal: Maybank tier 2 capital

Islamic Finance Awards

Maybank president and CEO Datuk Amirsham Aziz: first to raise subordinated bank capital in a islamic sukuk

Size isn't everything. This is certainly the case for the winning islamic sukuk deal, at only $300 million. Malaysia's Maybank became the first bank to raise subordinated bank capital in the form of a islamic sukuk. AseamBankers, HSBC Amanah and UBS led the deal for the Malaysian borrower, which was eventually priced as the tightest deal ever from an issuer in the southeast Asian nation, and the second-tightest subordinated debt deal from Asia, ex-Japan.

Maybank decided to undertake this form of transaction in order to diversify its investor base and allow Islamic investors to participate. The offering received an overwhelming response from international investors -- both Islamic and conventional -- that generated a solid, eight times oversubscribed order book of $2.4 billion. The deal was placed with 72 investors, with an average ticket size of $4.4 million despite 55 investors placing orders of more than $50 million. High demand drove the deal to price two basis points tighter than the guidance price of 35bp.

Despite this, some bankers quibbled that some points were still left on the table when the deal shot through the 30bp barrier only days after it was priced. But Public Bank's 10-year deal, which is an obvious comparable, was priced at Libor plus 37bp. This comparison reinforced the claim that Maybank's islamic sukuk was competitively priced.

About 64% of the paper went to investors in Asia, 13% to the Middle East and 23% to Europe. Commercial banks accounted for 60% of the deal, asset managers took 28%, and 9% went to institutional investors. Private banks bought the remaining 3%.