Shahrol Halmi, chief executive officer of 1Malaysia Development Bhd, speaks during an interview in Kuala Lumpur. The sovereign wealth fund yesterday said it is planning to sell $728.49mn worth of Islamic bonds.
Malaysian sovereign wealth fund 1Malaysia Development Bhd (1MDB) plans to sell 2.4bn ringgit ($728.49mn) worth of Islamic bonds to finance the relocation of defence units from land marked for government development project Bandar Malaysia.
Bandar Malaysia Sdn Bhd, a unit of 1MDB Real Estate Sdn Bhd, said in a statement to the central bank yesterday that it will issue one- to 10-year sukuk by private placement to unnamed buyers.
AmInvestment Bank Bhd is advising on the sale of the sukuk, which will not be rated by credit-rating firms.
The funds raised will be spent on building bases for eight defence units including the police, air force and an artillery regiment. Army pension fund Lembaga Tabung Angkatan Tentera won a 2.1bn ringgit contract nearly a year ago to relocate the units from the Bandar Malaysia site.
Bandar Malaysia is a 196-hectare development in the capital city, Kuala Lumpur.
1MDB’s last Islamic bond sale was in May 2009 when it sold 5bn ringgit worth of 30-year bonds.
The sovereign wealth fund, chaired by Prime Minister Najib Razak, is also raising funds to pay off $6.5bn in debt taken on to buy power plants and a joint venture with Abu Dhabi’s Aabar Investments.
