KUALA LUMPUR (March 7): KPJ Healthcare Bhd has successfully priced its inaugural RM555 million sustainability sukuk offering under its RM3 billion sukuk wakalah programme.

“The issuance has garnered overwhelming interest from fixed-income investors with a bid-to-cover ratio of close to 10 times,” the healthcare provider said, adding that the strong demand led to an upsize of the issuance size from the initial RM450 million to RM555 million with price tightening of 20 basis points across the five-year, seven-year and 10-year sukuk offering with profit rates of 4.5%, 4.69%, and 4.86% respectively.

In a statement, KPJ Healthcare said the offering via its wholly owned subsidiary Point Zone (M) Sdn Bhd marks a pioneering issuance by a private healthcare provider in Malaysia and the Asean region.

MARC Ratings Bhd had in November 2022 assigned a final rating of AA-IS(CG) (stable) to the sukuk wakalah programme, the group said.

KPJ Healthcare said utilisation of proceeds from the offering will be in accordance with criteria set out in its sustainability framework, which has been assigned a “Gold” rating by MARC Ratings.

According to the sustainability framework stated on KPJ Healthcare’s website, proceeds from the issuance can be used for capital expenditure, working capital, refinancing of existing borrowings, and other expenses, so long as they are not used to fund new or existing assets outside of the eligible assets.

Maybank Investment Bank Bhd and OCBC Al-Amin Bank Bhd are the joint principal advisers, lead arrangers and sustainability structuring advisers for the sukuk wakalah programme. 

Meanwhile, OCBC Al-Amin, Maybank Investment Bank, Affin Hwang Investment Bank Bhd and HSBC Amanah Malaysia Bhd are the joint lead managers of the programme.

KPJ Healthcare officer-in-charge Norhaizam Mohammad said the sustainability sukuk offering reflects the group’s commitment to championing the sustainability agenda, and also serves as a testament to its efforts in achieving a balance between economic ambitions, social goals and environmental considerations.

“We are resolute in prioritising the well-being of individuals or communities under our care as well as the environment, as we strive for a sustainable business performance," she said.

OCBC Bank managing director, senior banker and head of investment banking Tan Ai Chin said the bank is honoured to play a significant role in the sustainability sukuk offering to support KPJ Healthcare’s sustainability journey, which is aligned with its continuous effort to accelerate environmental, social and governance adoption by corporates through the provision of innovative and climate-friendly sustainable financial solutions.

“The success of the book-building exercise, which translates into optimal cost of funding for KPJ Healthcare also indicates the growing demand by investors for sustainable investment,” Tan added.

Meanwhile, Maybank Investment Bank CEO Datuk Fad'l Mohamed said the inaugural sustainability sukuk offering by KPJ Healthcare demonstrates the breadth of Malaysia’s debt capital market, with strong confidence reflected by the overwhelming response from a well-diversified pool of investors.

Shares in KPJ Healthcare ended two sen or 1.77% higher at RM1.15 on Tuesday (March 7), giving the group a market capitalisation of RM5.21 billion.