Khazanah raises RM100 million from second tranche of Sustainable and Responsible Investment (SRI) Sukuk
Proceeds to fund rollout of Trust Schools Programme to more schools

Khazanah Nasional Berhad (“Khazanah”) has successfully raised RM100 million via a second tranche of the seven-year Sustainable and Responsible Investment Sukuk (“SRI Sukuk”), issued by a Malaysian-incorporated independent Special Purpose Vehicle, Ihsan Sukuk Bhd (“Ihsan”). The settlement date of the SRI Sukuk will be on 8 August 2017.

Ihsan issued the first tranche of RM100 million SRI Sukuk in 2015, under its RM1.0bn Sukuk Programme. The second tranche was launched by Second Finance Minister Datuk Seri Johari Abdul Ghani on 13 June 2017.

Proceeds from this second tranche will fund the rollout of Yayasan AMIR’s (“YA”) Trust Schools Programme to at least 20 schools. YA is a not-for-profit foundation incorporated by Khazanah to improve accessibility of quality education in Malaysian Government schools through a Public-Private Partnership with the Ministry of Education. As of June 2017, the Trust Schools Programme has been rolled out to 83 schools across 10 states, creating better outcomes for over 65,000 young Malaysians.

The SRI Sukuk was priced at a profit rate of 4.6% if key performance indicators (“KPIs”) are not met, or 4.2% when KPIs are fulfilled. These KPIs set the required achievement levels for the number of Trust Schools to be implemented, the performance of teachers and the respective schools’ senior leadership, as well as student outcomes. Additionally, the unique step-down returns structure and option to waive the principal of the SRI Sukuk offers investors the possibility of staggered contributions upon meeting the social impact targets of the Trust Schools Programme.

The SRI Sukuk is also the first in Malaysia to feature a retail offering, providing an opportunity for individual Malaysians to participate in supporting the further implementation of the Trust Schools Programme. Through the retail offering, investors are able to give back to society via impact investing. Both the institutional and retail portions were well received and fully subscribed.

Members of the public who were unable to subscribe to the SRI Sukuk can still support the Trust Schools Programme through crowdfunding platforms on ATAPlus (http://ata-plus.com/deals/KhazanahSRI) and pitchIN (http://reward.pitchin.my/project/KhazanahSRI). The platforms will be open until 13 August 2017.

The structure of the SRI Sukuk is in accordance with the Islamic principle of Wakalah Bi Al-Istithmar. CIMB Investment Bank Berhad (“CIMB”) is the sole Lead Arranger, while CIMB, Maybank Investment Bank and RHB Investment Bank are the Joint Bookrunners and Joint Lead Managers for this SRI Sukuk transaction.

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