Khazanah Nasional Berhad (“Khazanah”) bagged three Deals of The Year Awards (2006) for a single transaction – the US$750 million Rafflesia Capital Exchangeable Trust Certificates (“Exchangeable Sukuk”) – at the Islamic Finance News Awards on Wednesday, 28 March 2007, which was held in conjunction with the Global Islamic Finance Forum 2007.
The landmark Exchangeable Sukuk receives awards in two global categories, the Most Innovative Deal of The Year and Sovereign Deal of The Year; and overall winner for Malaysia via Malaysian Deal of The Year.
Exchangeable Sukuk represents the world’s first Shariah compliant exchangeable bond and is the largest exchangeable issue out of Asia (excluding Japan) in 2006. It even surpassed Khazanah’s previous conventional exchangeable Sukuk issuance in terms of issue size.
The awards mark the 11th, 12th and 13th recognition garnered by Exchangeable Sukuk since its launch on 27 September 2006. Other accolades awarded to Exchangeable Sukuk were Best Sukuk Deal by Euromoney; Best Equity Linked Deal and Best Deal (Malaysia) by The Asset; Best Equity Linked Deal by Asia Money; Most Innovative Product by KLIFF 2006; Best Equity Linked Deal and Best Capital Market Deal by IFR; and Deal Of The Year by The Banker.
The issuance has been widely regarded as instrumental in exposing the Islamic world to the many possibilities of structuring innovative Islamic financial product. It has also reinforced Malaysia’s reputation in Islamic financing innovation and Islamic financing hub and set a new benchmark for both global Islamic investors and conventional equity-linked investors. Despite the fact that the Islamic investors in general are unfamiliar with equity-linked instruments, the Sukuk was well received by both conventional and Islamic investors.
Khazanah explored the opportunity to issue the Exchangeable Sukuk with the objective to pave the way for development of innovative Shariah-compliant financial products and the global Islamic financial markets in general.
This issue heralded the beginning of a new generation of Islamic financial products, and since then, the market has witnessed more issuance of Shariah compliant equity-linked products with 2 convertible Sukuk issued in the last 5 months alone.
Khazanah also wanted to access the pool of Islamic investors located mainly in the Middle East. This objective was more than achieved with the Sukuk being distributed to a mix of quality investors from Middle East and global investors including financial institutions, asset managers, insurance companies, pension funds and high net worth individuals. The allocation by region was 30% Middle East, 40% Europe and 30% Asia and the rest.