UDA Holdings Bhd (UDA) has issued a sukuk wakalah worth RM1 billion in the form of Islamic Medium Term Notes and Islamic Commercial Paper.
Entrepreneurship and Cooperatives Development Minister Datuk Ewon Benedick lauded UDA’s move to issue the sukuk and said it was aligned with the current economic development in the country.
Ewon said the sukuk held significant meaning to the country as a whole and to UDA, as the company pioneered the definition of Sustainable Responsible Investment for the development of wakaf projects.
“Funding requirements for development projects under the wakaf category used to be done internally. Now, they can be met via the sukuk issuance by UDA.
“This initiative also solves issues surrounding funding, because there are not many options offered by commercial banks for these types of projects,” Ewon said in his speech during UDA’s town hall session with investors.
The minister cited a report published by Fitch Ratings that noted the global sukuk market was expected to increase, albeit at a slower rate this year due to economic uncertainties.
The global outstanding sukuk market reached US$765.3 billion last year, which was 7.6 per cent higher than 2021.
“Based on these statistics and Bank Negara Malaysia’s estimated growth for the country of between four to five per cent, I believe the sukuk wakalah issued by UDA will reach its target,” Ewon said.
MARC Ratings Bhd had given a rating of MARC-1IS/AA-IS for UDA’s issuance of the sukuk wakalah.
The ratings agency also viewed UDA’s role in the property development sector as being in line with the country’s socio-economic objectives.
“UDA’s focus on developing housing and commercial projects in the city reflects its support towards the government’s social policy.
“These efforts are important since the sukuk that will be issued includes sustainability elements which require UDA to meet all the criteria set under the Sustainability Sukuk Framework,” said Ewon.
UDA currently has total assets worth RM3.7 million.
Up to September last year, the company had undertaken development projects worth RM494.8 million. It also has reserve land which spans 410.35ha with a market value of RM2.6 billion.
UDA president and chief executive officer Datuk Mohd Salem Kailany said the sukuk would strengthen the company’s role in its business segments, which were property, property investment and management, hospitality and facility management.
He said funds from the issuance would be used as working capital for the financing of commercial, housing and industrial development projects, as well as wakaf-related projects.
They will also be utilised by the company’s asset management unit to enhance the application of solar energy in buildings managed by UDA, subsequently empowering the usage of renewable energy.
“In line with the global development that prioritises sustainability in every organisation, UDA’s sukuk wakalah also utilises the Sustainability Sukuk Framework issued by the Securities Commission of Malaysia.
“It encompasses Asean Green Bond Standards, Asean Social Bond Standards and Asean Sustainability Bond Standards.
“It also aligns with all their principles, as well as the sustainable bond guidelines outlined by the United Nation Sustainable Development Goals,” said Salem.
© New Straits Times Press (M) Bhd
