RHB Islamic has had an impressive first year in operation. Its most prominent transaction was the Shariah-compliant Mukah power plant project finance deal that RHB lead managed for Sarawak Enterprise Corporation.
The deal, a first of its kind in Malaysia, was used to finance a greenfield power plant project. Under the financing structure, two bonds were issued: the first was a M$950 million ($270 million) sukuk mudarabah and the second was a M$125 million sukuk musyarakah. Notably, 100% financing was required, in line with the mudarabah principle, and this was fully underwritten by RHB. “We were confident this deal would be successful and so we underwrote it. In the end we had to shut the window early because of overwhelming demand,” says Khalid Bhaimia, chief executive officer at RHB Islamic.
In 2006 RHB Islamic developed its underlying asset base, with the use of an innovative product for the leasing of plantations, different from traditional default payment financing. Another 16 products were launched throughout the year across all banking sectors, meaning that RHB Islamic offer the widest Islamic product range in Malaysia. Innovative products launching soon include an overdraft facility, staggered draw-down times for project financing deals and further capital-intensive products.