Malaysia’s Samurai Bonds
The Minister of Finance, YB Lim Guan Eng, has recently announced the completion of the issuance of Samurai bonds in the aggregate principal amount of ¥200 billion (approximately RM7.3 billion), which took place last week. The bonds were oversubscribed by more than 1.6 times at ¥324.7 billion. It was also announced that the proceeds from the bond issuance would be used to fund infrastructure developments, including the construction of schools, hospitals, roads and utilities.
The Samurai bonds, guaranteed by the Japan Bank for International Cooperation with a tenure of 10 years, marks Putrajaya’s return to the yen bond market after 30 years, as the last yen-denominated bond issuance by Malaysia was in 1989. Mizuho Securities Co Ltd, HSBC Securities (Japan) Ltd and Daiwa Securities Co Ltd are the joint lead arrangers for this recent issuance.
Lee Hishammuddin Allen & Gledhill was appointed by the government of Malaysia to act as its Malaysian legal counsel. The legal team consists of:
- Ong Eu Jin, a partner with the firm’s Corporate Finance Practice who, together with senior associate Eileen Tan, liaised with Japanese solicitors comprising Anderson Mōri & Tomotsune; Clifford Chance, and Shimazaki International Law Office, andadvised on the transaction documents as to the various aspects of Malaysian law; and
- S Saravana Kumar, a partner with the firm’s Tax, SST & Customs Practice, who advised on tax-related matters under Malaysian law including withholding tax in respect of the issuance.
If you have any queries on corporate and tax matters pertaining to financing instruments (including bonds and medium-term loans), please contact Ong Eu Jin (email@example.com) or S Saravana Kumar (firstname.lastname@example.org).
20 March 2019