Ringing the changes
In a year when ringgit bond market volumes shrank as major infrastructure projects were put on hold, Maybank Investment Bank made a concerted effort to support high-profile deals and drive the market forward.
“We had a fantastic year dominating the market in all segments and we made sure we were involved in nearly every single large deal,” said Wong Kwok Kuan, Maybank’s managing director and regional head of debt markets.
“At the same time, we brought innovative solutions to our clients that continued to develop our bond market.”
One unusual example was Cypark Ref’s M$550m (US$132m) solar power project financing sukuk, which funded the construction of three 30-megawatt solar power plants. As sole financial adviser, lead arranger and manager, Maybank provided what it termed a “reverse engineering” solution. In project financing, the project company typically raises the funds, but the costs and structuring involved make it inefficient for small individual projects to come to the capital markets. Cypark Ref, as the EPC contractor for three solar power plants owned by different companies, set out to raise the funds instead, thus maximising economies of scale.
When the deal launched in October, investors were still recovering from a protracted delay at Quantum Solar Power Semenanjung’s power project that had hurt demand for its M$1bn project bond. Maybank and Cypark worked hard during intensive meetings with investors to explain the complex deal structure, allowing the project bond with tenors of up to 21 years to cross the line comfortably, priced in a range of 4.50%–5.99%.
Maybank also led the only foreign issue of the year in the ringgit market, placing a M$700m sukuk for Indonesian palm oil company Bumitama Agri. As sole adviser, Maybank spotted a window in July when currency swaps moved in Bumitama’s favour and drew M$2.68bn of orders, allowing the issuer to tighten pricing by 15bp from guidance.
The bank kept its nerve in tricky situations, including Press Metal’s local market debut. The aluminium producer’s M$1bn multi-tranche sukuk was set to launch when S&P downgraded its rating to B+. Maybank arranged several investor meetings that helped turn investors’ concerns into a strong order book from some 30 accounts.
Maybank also took the lead on unrated bonds, supporting the government’s push to liberalise the bond market and improve liquidity. It led over M$8bn of unrated Islamic and conventional bonds during IFR’s review period, more than three times its closest rival.
The bank’s successful year is a culmination of efforts to reorganise the capital markets division over the past two years and closer collaboration with the wealth management divisions.
“Despite a challenging year, our commitment to being client-focused and solutions-driven has enabled us to be steadfast and continue to deliver quality transactions,” said Wong.