KUALA LUMPUR (May 30): Small Medium Enterprise Development Bank Malaysia Bhd (SME Bank) announced that its five-year sustainability sukuk had been oversubscribed with orders exceeding RM1 billion, surpassing the initial desired size of RM500 million.

Group president and chief executive officer Datuk Aria Putera Ismail said that due to overwhelming demand from local and foreign financial institutions, fund management companies, takaful and insurance firms, as well as government-linked investment companies, SME Bank has opted to upsize the total issuance amount to RM1 billion.

“This achievement demonstrates the confidence of investors and the wider financial community in SME Bank’s ability to drive the SMEs’ growth, especially in ensuring they sustain.

“The SME Bank Sustainability Sukuk was priced at a competitive profit rate of 4.05% amid a challenging market environment,” he said in a statement.

SME Bank said its sukuk wakalah programme had been assigned AAA ratings by the Malaysian Rating Corporation Bhd (MARC) and achieved the “Gold” standard - the highest rating under MARC’s sustainability sukuk framework.

“These accolades highlight SME Bank’s strong creditworthiness and unwavering commitment to sustainable practices,” it said.

The bank said the proceeds from this sukuk issuance would be exclusively utilised to finance projects aligned with environmental, social, and governance (ESG) considerations.

“This strategic focus on ESG projects not only contributes to sustainable development but also empowers SME Bank to offer innovative financing solutions, tailored to the unique needs of small and medium enterprises,” SME Bank added.

https://www.theedgemarkets.com/node/669180