The issue is part of a 3.5 billion ringgit funding program that GIC has set up in the Southeast Asian country.
Issuers seeking Shariah-compliant funding can tap into an estimated $79 billion in excess liquidity in Malaysia.
Dubai is working on plans to issue about $1.5 billion in sovereign sukuk in Malaysia, while National Bank of Abu Dhabi, the UAE’s largest lender by market value, recently launched 500 million ringgit in 10-year sukuk.
GIC, created to drive private enterprise and economic growth in the Gulf region, had upsized its five-year deal to 600 million ringgit from 500 million ringgit due to strong demand, said a source with direct knowledge of the deal.
The bonds were oversubscribed by 1.7 times and will be issued on March 1, the source added.
GIC was not immediately available for comment.
RBS is the deal’s sole principal adviser and arranger. RBS and Maybank Investment Bank are the joint lead managers.
The fund-raising program was rated AAA, the highest rating, by Malaysia’s RAM Ratings.
The Islamic bonds are structured so that GIC will be appointed as agent to collect and manage the sukuk proceeds for the bondholders.
GIC then appoints itself to manage the sukuk assets and will invest the net proceeds through a commodity Murabaha financing arrangement and a sub-wakala investment facility. Proceeds will be channeled into Shariah-compliant ventures.
GIC’s investments include companies such as The National Titanium Dioxide Company, Gulf Industrial Investment, Gulf Re Holdings Ltd., Al-Dur Power & Water Company and National Industrialization Company.
GIC issued 1 billion ringgit of bonds in Malaysia in 2008.
Issuers in Malaysia accounted for about 60 percent of total global Islamic bond sales of $14.3 billion in 2010, according to estimates by Thomson Reuters.
