<article>Malaysia has hired three banks to manage the issuance of a sovereign Islamic bond, or sukuk, of up to $2 billion with more than five years debt maturity.</article>

Malaysia has hired three banks to manage the issuance of a sovereign Islamic bond, or sukuk, of up to $2 billion with more than five years debt maturity.
<a style="color: #000080" href="http://www.reuters.com/" target="_blank">Reuters</a> said the banks are <a style="color: #000080" href="http://www.dealstreetasia.com/?s=CIMB+Group+Holdings+Bhd" target="_blank">CIMB Group Holdings Bhd</a>, <a class="vglnk" style="color: #000080" href="http://www.reuters.com/finance/stocks/overview?symbol=HCS" rel="nofollow">HSBC Holdings Plc</a> and Standard Chartered Bank Plc, according to the sources.
Officials with CIMB and HSBC had declined to comment while officials at Standard Chartered and the finance ministry were not immediately available to comment.
Lower global energy prices have hit revenues for Malaysia, Southeast Asia&#8217;s second-largest oil and natural gas producer, and knocked the ringgit to a six-year low, the news wires noted.
Problems stemming from a heavily-indebted investment fund, <a style="color: #000080" href="http://www.dealstreetasia.com/?s=1Malaysia+Development+Bhd+%281MDB%29" target="_blank">1Malaysia Development Bhd (1MDB)</a> and the prospect of the first rise in US interest rates in almost a decade, have also added to the risk of a sovereign downgrade and capital outflows.
Government-owned oil and gas producer<a href="http://www.petronas.com.my/" target="_blank"> Petronas</a> on Wednesday sold a $5 billion four-tranche bond, including a five-year sukuk, IFR, a Thomson Reuters publication reported.
Bloomberg reported that Malaysia’s decision to press ahead with its first dollar sukuk since 2011 reflects investor appetite for yields at an eight-month high, as the government limits the fallout from the break up of a state investment company.
The yield on Malaysia’s 2021 US currency sukuk, one of three outstanding, rose to 3.17 per cent last week, the highest since July and up from a two-year low of 2.59 per cent in October, according to data compiled by Bloomberg.
The government provided 1MDB with a $257 million standby credit facility earlier this month, helping allay investor concern that the company would default after delaying a loan repayment.
As markets welcomed the planned unwinding of 1MDB’s businesses, state oil company Petroliam Nasional Bhd sold a record amount of dollar bonds last week even amid a plunge in oil prices, Bloomberg noted.
“The government will be able to use the Petronas sale as a proxy to price its sukuk,” Jesse Liew, Kuala Lumpur-based head of global Islamic bonds at BNP Paribas Investment Partners Malaysia, which has more than $900 million of asset, told Bloomberg. “1MDB’s debt concerns won’t be much of an issue as they are already factored in by the market.”
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<a style="color: #ff0000" title="1MDB calls off $2.4b Islamic bond issue" href="http://www.dealstreetasia.com/stories/1mdb-calls-off-2-4b-islamic-bond-issue-2817/" rel="bookmark">1MDB calls off $2.4b Islamic bond issue</a>
Image: <a href="http://www.freedigitalphotos.net/images/Money_g61-Close_Up_Of_Malaysian_Ringgits_p139213.html" target="_blank">Freedigitalphotos.net</a>

Malaysia has hired three banks to manage the issuance of a sovereign Islamic bond, or sukuk, of up to $2 billion with more than five years debt maturity.

Malaysia hires lenders to manage $2b sovereign Islamic bond

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Malaysia hires lenders to manage $2b sovereign Islamic bond

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