Home Islam BNM may buy up to 10% of Malaysian government’s RM3bn Islamic bonds

BNM may buy up to 10% of Malaysian government’s RM3bn Islamic bonds


KUALA LUMPUR (January 26): Bank Negara Malaysia (BNM) said it could buy up to 10% of the RM3 billion offered by the Malaysian government in the form of government investment issues (GIIs) under of the Murabahah principle in accordance with the Government Funding Act. 1983.

In a filing with the Fully Automated Issuance/Tender System (FAST) website of BNM, the central bank, which is the facility agent for the RM3 billion Islamic bond issuance, said the securities, which pay an annual profit rate of 3.447%, will be issued on Monday (Jan 31, 2022) for maturity on July 15, 2036.

“BNM can buy up to 10% of the issue size,” BNM said.

According to BNM, the RM3 billion Islamic bond program is opened for auction by bidders on Wednesday, while the closing date for the bidding exercise is Friday at 11:30 am.

In the prospectus for the RM3 billion Islamic bond program, BNM said the initial issuance date of the securities was January 15, 2021 and bidders’ application is expected to be submitted through 19 dealers comprising of conventional main concessionaires and Islamic main concessionaires.

Main conventional dealers include AmBank Bhd, CIMB Bank Bhd and United Overseas Bank (M) Bhd, while main Islamic dealers include Affin Islamic Bank Bhd, Bank Islam Malaysia Bhd and Maybank Islamic Bank Bhd.

“Major Dealers and Leading Islamic Dealers are invited to bid for the reopening of No.1 Malaysian GII 2021.

“The 2021 Series 1 investments will be redeemed at par on July 15, 2036. On the maturity date of the investment, BNM will credit the current account of each participating investment institution/custodian institution of the principal funds represented by permanent investments in its own securities account and/or in the clients’ global account.

“Profit is payable semi-annually on January 15 and July 15 and the first such payment on additional issues will be made on July 15, 2022, calculated from January 15, 2022 at the profit rate of 3.447%. will cease after the maturity date of this stock,” BNM said.

He said the request for securities must be in multiples of RM1 million with a minimum value of RM5 million.

According to the BNM, transfers of securities to successful bidders are exempt from payment of stamp duty.

“BNM reserves the right to accept or reject any application without giving reasons. Where an application is accepted in part only, no allocation will be made for stock less than RM10,000.

“Payment of amounts accepted and awarded must be made in full on the date of issue. To this end, the candidates authorize the BNM to debit their respective current accounts held with the BNM for the cost of the allocated investments. bids, will be expressed to three decimal places when awarded,” BNM said.