Kuala lumpur: Syarikat Takaful Malaysia Keluarga Bhd (Takaful Malaysia) has announced plans to establish a Tier 2 subordinated sukuk programme with a nominal value of up to RM1 billion. The programme will operate under the shariah principle of wakalah bi al-istithmar.

According to BERNAMA News Agency, the company submitted a filing with Bursa Malaysia stating that the sukuk wakalah programme will facilitate the issuance of Tier 2 subordinated sukuk with a minimum tenure of five years. The issued sukuk is intended to qualify as Tier 2 capital for Takaful Malaysia within the framework provided by Bank Negara Malaysia’s Risk-Based Capital Framework for Takaful Operators, dated December 17, 2018. The framework may be subject to future amendments or revisions.

Takaful Malaysia has lodged the necessary information and documents with the Securities Commission Malaysia under the Lodge and Launch Framework. The company has received a takaful financial strength rating of AA2 from RAM Rating Services Bhd, while the sukuk programme itself has an AA3 credit rating.

The funds raised through the Tier 2 sukuk wakalah will be allocated for the company’s working capital, corporate needs, and refinancing of the Tier 2 sukuk wakalah or other shariah-compliant capital instruments. The utilisation of proceeds will adhere to shariah-compliant purposes.

CIMB Investment Bank Bhd is serving as the sole principal adviser, lead arranger, and lead manager for the sukuk wakalah programme, with CIMB Islamic Bank Bhd acting as the shariah adviser.