The primary listing of USD200 million Non-cumulative Guaranteed Preference Shares issued by SBB Capital Corporation, a Labuan incorporated offshore company and wholly-owned subsidiary of Southern Bank Berhad today marked the debut of an Innovative Hybrid Tier 1 capital raising by a Malaysian bank in the international capital markets. The Non-cumulative Guaranteed Preference Shares is issued as an Innovative Tier 1 Capital under the Bank Negara Malaysia Guidelines for Innovative Tier 1 Capital Instruments.
The Non-cumulative Guaranteed Preference Shares, which bears an interest rate of 6.62% per annum, are guaranteed by SBB and has a rating of Ba2 from Moody's Investors Services Limited and BB+ from Fitch Rating.
The listing sponsor for SBBC was Avenue Securities Sdn Bhd. UBS AG Labuan Branch was the lead manager and bookrunner for the issuance of the Non-cumulative Guaranteed Preference Shares, which was oversubscribed by 4 times.
"This is certainly a milestone for LFX. It provides an avenue for expanding the capacity for domestic and international financial institutions and enables them to reach a wider market. We are very encouraged by the response this listing received and hope more financial institutions will take advantage of similar opportunities available to them at the Labuan International Financial Centre and LFX," said Chairman of LFX Board Encik Yusli Mohamed Yusoff, who is also the Chief Executive Officer of Bursa Malaysia Berhad.
The Non-cumulative Guaranteed Preference Shares is the 7th instrument listed on LFX for year 2005. With the latest listing, LFX's range of financial instruments now comprises six (6) Syariah-compliant certificates (Sukuk), six (6) open-ended funds and twenty one (21) conventional debt securities and exchangeable bonds. This brings the total market capitalisation of LFX to USD12.49 billion.