Affin Arranges RM400 Million Financing for KL Sentral Park
Affin Investment Bank Berhad (“Affin Investment”) was appointed by MRCB Sentral Properties Sdn Bhd, a wholly-owned subsidiary of Malaysian Resources Corporation Berhad (“MRCB”), to act as the Principal Adviser and Lead Arranger in relation to the Guaranteed Commercial Paper / Medium Term Note (CP/MTN) programme of up to RM400 million, in a signing ceremony held on 28 July 2010. In 2009, Affin Investment had arranged a RM499m syndicated term loan facility for MRCB.
This Guaranteed CP/MTN programme also marks the second Danajamin Nasional Berhad (“Danajamin”) issue arranged by Affin Investment in the last two months. Danajamin is Malaysia’s first Financial Guarantee Insurer that provides financial guarantee insurance for bonds and sukuk issuances to financially viable Malaysian companies to enable access to the Capital Market.
This exercise further enhances Affin Investment’s role as a catalyst in the broadening and deepening of the bond market and is a testament to Affin Investment’s role as the intermediary for efficient allocation and capital and facilitating risk management for the financial market.
As the Financial Adviser / Lead Arranger to MRCB, Affin Investment is proud to be able to provide MRCB with an alternative source of funding. The fund raising exercise started with a floating rate loan syndication, but along the way, as the interest rates inched up and expect to continue to trend upwards, an option of both floating and fixed rate instrument is proposed, namely, the CP/MTN programme. The Medium Term Note (“MTN”) allows fixed rate funding wherein MRCB can lock in the current low rates of interest, given the current financial environment where interest rates are trending upwards. The Commercial Paper (“CP”), on the other hand, allows MRCB to issue short term notes on floating rate basis.
The Danajamin Guaranteed CP/MTN Programme enables MRCB to raise funding at very competitive rates to fund another landmark project in KL Sentral and more importantly, being rated MARC1 and AAA, it provides the most competitive pricing which can lower the interest costs and thereby increasing returns on shareholders’ funds.
Affin Investment is honoured to be involved in another landmark development of MRCB. Proceeds from the CP/MTN Programme will be channelled towards construction cost of a mixed commercial development to be known as KL Sentral Park. KL Sentral Park’s unique green development concept has won the Green Mark Platinum (Provisional) Award, the highest rating accorded by Singapore’s Building and Construction Authority (“BCA”). It is also Malaysia’s first commercial development to be accorded this prestigious award.
