WSJ WALL STREET JOURNAL - HONG KONG—The Malaysian government's investment holding arm Khazanah
Nasional Bhd., which is looking to issue as much as $78.3 million in
yuan-denominated Islamic trust certificates, or sukuk, postpone the
pricing of the bond due to volatile market conditions, people familiar
with the situation said Thursday. (source)
The news came as yields on long-dated Japanese government bonds fell
to multi-month lows in Tokyo, weighed down by similar falls in Treasury
yields after the Federal Reserve's policy-setting Open Market Committee
announced the previous day it will increase its share of longer-dated
Treasurys by $400 billion by June 2012.
The yield on benchmark 10-year Japanese government debt hit a
ten-month low at 0.965%. The 20-year yield fell to an 11-month low at
1.675% and the 30-year yield also dropped to an 11-month low at 1.850%.
Khazanah Nasional's planned bond issuance, which could make it the
first quasi-sovereign Asian entity to tap the burgeoning yuan market
outside of China, will have to wait until market conditions improve, the
people said.
Earlier, a person familiar with the situation said the bond would be
priced during the course of the day and that Khazanah was seeking to pay
a yield of around 2% for the unrated, unsecured three-year issue.
The issue's order book was so far 1.5 times subscribed, the person said.
Another person familiar with the matter said Khazanah is seeking to
raise 300 million to 500 million yuan ($47 to $78.3 million) through the
offering.
The deal will be issued by Danga Capital Bhd., which is owned by
Khazanah Nasional, a term sheet seen by Dow Jones Newswires Thursday
showed.
Proceeds will be used to acquire assets compliant with Islamic
Shariah law, for working capital, and for general Shariah-compliant
corporate purposes, the term sheet said.
BOC International, CIMB and Royal Bank of Scotland are joint
bookrunners of the issue, it said. CIMB is also acting as Shariah
adviser.
The offshore yuan market has taken off since China relaxed some of
its rules on the use of yuan in Hong Kong in July 2010. Yuan deposits in
Hong Kong totaled 572.2 billion yuan at the end of July, up from 553.6
billion yuan a month earlier, boosted by investors speculating that the
value of the Chinese currency will appreciate.
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