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DanaInfra Nasional Berhad
ICP/IMTN Programme Principal Terms and Conditions
Private and Confidential
ISLAMIC COMMERCIAL PAPERS AND ISLAMIC MEDIUM TERM NOTES
ISSUANCE PROGRAMME OF UP TO RM21.0 BILLION IN NOMINAL VALUE
GUARANTEED BY THE GOVERNMENT OF MALAYSIA
(“ICP/IMTN PROGRAMME”)
PRINCIPAL TERMS AND CONDITIONS OF THE ICP/IMTN PROGRAMME
(a)
Names of parties involved in the proposed transaction
(i)
Issuer
:
DanaInfra Nasional Berhad (“DINB”).
(ii)
Guarantor
:
Government
“Guarantor”).
(iii)
Joint Lead Arrangers
:
(i)
AmInvestment Bank Berhad (“AmInvestment”);
(ii)
CIMB Investment Bank Berhad (“CIMB”);
(iii)
Maybank Investment Bank Berhad (“Maybank
IB”); and
(iv)
RHB Investment Bank Berhad (“RHB”).
(i)
AmInvestment;
(ii)
CIMB;
(iii)
Maybank IB;
(iv)
Joint Lead Managers/Joint
Bookrunners (“JLAs”)
:
of
Malaysia
(“Government”
or
(iv) RHB;
and such other financial institutions to be determined
(if applicable).
(v)
Facility Agent
:
CIMB.
(vi)
Shariah Adviser
:
CIMB Islamic Bank Berhad.
(vii)
Solicitors
:
(i) Acting for the JLAs
Messrs. Mohamed Ridza & Co.
(ii) Acting for the Issuer
Messrs. Adnan Sundra & Low.
(viii) Primary Subscriber(s) and
Amount Subscribed
:
The Primary Subscribers (if any) will be determined
prior to the issuance of the relevant Sukuk (defined
hereunder), in the case where the Sukuk are issued
via bought deal or direct placement on a best effort
basis.
(ix)
:
(i)
Central Depository &
Paying Agent
Central Depository
Bank Negara Malaysia (“BNM”) and/or Bursa
Malaysia Depository Sdn Bhd (“Bursa
Depository”).
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DanaInfra Nasional Berhad
ICP/IMTN Programme Principal Terms and Conditions
(ii)
Private and Confidential
Paying Agent
BNM and/or
identified.
(b)
Facility Description
(including the description of
Islamic principle)
:
such
other
parties
to
be
An Islamic commercial papers (“ICP”) and Islamic
medium term notes (“IMTN”) programme of up to
RM21.0 billion in nominal value irrevocably and
unconditionally guaranteed by the Government
(“ICP/IMTN Programme”).
The ICPs and IMTNs are collectively referred to as
“Sukuk”.
Islamic Principle
Murabahah and/or such other Islamic principle(s)
(including but not limited to Wakalah, Musyarakah,
Ijarah, Bai’ Inah or Bai’ Bithaman Ajil) acceptable to
the JLAs and the Issuer to be determined prior to
each Sukuk issuance.
The Transaction Documents (defined hereunder) will
provide that no approval from the holders of any
Sukuk (“Sukukholders”) will be required, throughout
the tenure of the ICP/IMTN Programme for the
Issuer:
(i)
to issue Sukuk under the ICP/IMTN
Programme based on Islamic principles other
than Murabahah (including but not limited to
Wakalah, Musyarakah, Ijarah, Bai’ Inah or Bai’
Bithaman Ajil); or
(ii)
to amend the structure described in this
Principal Terms and Conditions so as to
comply with any future requirements of the
structure under the Murabahah principle; or
(iii)
to amend the structure of any Islamic principles
(other than Murabahah) which may be adopted
by the Issuer so as to comply with any future
requirements of the structure under those
Islamic principles.
Prior approval from the Shariah Adviser will have to
be obtained in respect of items (i), (ii) and (iii) above .
For the avoidance of doubt, any changes to the
structure of the Islamic principle(s) of any Sukuk
which are outstanding shall require the prior approval
of the Sukukholders of such outstanding Sukuk.
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DanaInfra Nasional Berhad
ICP/IMTN Programme Principal Terms and Conditions
Private and Confidential
A. Murabahah
1.
From time to time, DINB and the Facility Agent
(acting on behalf of the potential Sukukholders)
will execute an asset purchase agreement
(“Purchase Agreement”) under which the
Facility Agent shall purchase certain Shariahcompliant assets (“Assets”) from DINB for an
asset purchase price (“Purchase Price”). The
Purchase Price will be the amount to be
disbursed under the Sukuk and will be in
compliance with asset pricing requirements
stipulated under the Securities Commission
Malaysia (“SC”)’s Guidelines on Sukuk (revised
and effective on 8 January 2014) as may be
amended from time to time (“Guidelines on
Sukuk”).
2.
The Issuer shall then issue Sukuk to evidence
the Sukukholders’ ownership of the Assets and
thereafter, upon the onward sale of the Assets
to DINB, the Sale Price (as defined hereinafter)
and the rights of the Sukukholders via the
Facility Agent under the Sale Agreement (as
defined hereinafter). The proceeds received
from the Sukukholders shall be used by the
Facility Agent to pay the Purchase Price.
3.
Pursuant to a Murabahah arrangement
(“Murabahah Arrangement”), the Facility Agent
(acting on behalf of the Sukukholders) will then
sell the Assets to DINB via a sale agreement
(“Sale Agreement”) for an asset sale price
(“Sale Price”), which shall be paid by DINB on
a deferred basis and shall be evidenced by the
Sukuk.
A diagrammatical illustration of the Murabahah
transaction is set out in Annexure 1.
B. Murabahah (via a Tawarruq arrangement)
1.
The Facility Agent, on behalf of the
Sukukholders, and the Issuer shall enter into
an agency agreement (“Purchase Agency
Agreement”), pursuant to which the Issuer is
appointed as the agent of the Sukukholders (in
such capacity, the “Purchase Agent”) for the
purchase of Shariah-compliant commodities
which would exclude ribawi items in the
category of medium of exchange such as
currency, gold and silver (“Commodities”). The
Purchase Agent shall then enter into a subagency agreement (“Sub Agency Agreement”)
to appoint the Facility Agent as a sub agent (in
such capacity, the “Sub Agent”) to purchase
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ICP/IMTN Programme Principal Terms and Conditions
Private and Confidential
the Commodities.
2.
Pursuant to a commodity Murabahah master
agreement (“Commodity Murabahah Master
Agreement”), prior to the date on which the
relevant tranche of Sukuk is issued, the Issuer
(as “Purchaser“) shall, from time to time, issue
a purchase order (“Purchase Order”) in relation
to the said tranche to the Purchase Agent and
the Sub Agent. In the Purchase Order, the
Purchaser will request the Purchase Agent and
the Sub Agent to purchase the Commodities.
The Purchaser shall irrevocably undertake to
purchase
the
Commodities
from
the
Sukukholders via the Sub Agent at the sale
price (“Sale Price”) on a deferred basis.
3.
The Sub Agent pursuant to an agreement
(“CTP Purchase Agreement”) to be entered
into between the Sub Agent and the commodity
trading participant (“CTP”), will appoint the CTP
to purchase the Commodities on a spot basis
from the commodity supplier(s) in the Bursa
Suq Al Sila’ (“Commodity Seller(s)”) at a
purchase price (“Purchase Price”) which shall
be an amount equivalent to the Sukuk
proceeds. The Purchase Price shall be in line
with the asset pricing requirements stipulated
under the Guidelines on Sukuk.
4.
The Issuer shall issue the Sukuk to the
Sukukholders whereby the proceeds thereof
shall be used to pay for the Purchase Price.
The Sukuk shall evidence, amongst others, the
Sukukholders’ ownership of the Commodities
and subsequently once the Commodities are
sold to the Purchaser, the Sukukholders’
entitlement to receive the Sale Price.
5.
Thereafter, pursuant to a sale and purchase
agreement (“Sale and Purchase Agreement”),
the Sub Agent (acting on behalf of the
Purchase Agent as agent of the Sukukholders)
shall sell the Commodities to the Purchaser
based on the Murabahah principle at the Sale
Price.
6.
Upon completion of such sale the Purchaser,
pursuant to an agreement (“CTP Sale
Agreement”) entered into between the
Purchaser and the CTP, shall appoint the CTP
to sell the Commodities to Bursa Malaysia
Islamic Services Sdn. Bhd. (“Commodity
Buyer”) on a spot basis for an amount equal to
the Purchase Price.
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DanaInfra Nasional Berhad
ICP/IMTN Programme Principal Terms and Conditions
Private and Confidential
A diagrammatical illustration of the Murabahah (via a
Tawarruq arrangement) transaction is set out in
Annexure 2.
The Sale Price will represent the Purchase Price plus
the applicable profit margin i.e. the aggregate
periodic profit payments based on a fixed profit rate
to be agreed at the time of issuance (if applicable)
plus the Discounted Amount (as defined hereinafter)
calculated at the issue date of each relevant Sukuk
issuance (if applicable).
“Discounted Amount” means the difference between:
(i) the nominal value of the relevant Sukuk or (ii) the
accreted value of the relevant IMTN (whichever is
applicable) and the Purchase Price of the relevant
Sukuk, in the case of Sukuk issued at a discount.
DINB (as part of its obligation to pay the Sale Price)
shall make periodic profit payments in the case of
IMTNs with profit payments or one-off payment to the
Sukukholders in the case of Sukuk without periodic
profit payments (“One-off Payment”). At (i) the
maturity date of the Sukuk; or (ii) upon the
declaration of an Event of Default whichever is
earlier, DINB (as part of its obligation to pay the Sale
Price) will pay the Sukukholders all amounts then
outstanding on the Sale Price as final settlement of
the same subject to the Redemption Rebate (as
defined hereinafter) (if applicable), upon which the
Sukuk will be cancelled.
In the case of IMTNs
A Redemption Rebate will be granted by the holders
of the IMTNs (“IMTNholders”) if the IMTNs are
redeemed prior to the maturity date. “Redemption
Rebate” means the difference between (a) the Sale
Price at issue date and (b) the Sale Price calculated
up to the date of the declaration of an Event of
Default. For purposes of calculating the Redemption
Rebate, (a) the Sale Price at issue date shall be
calculated based on the following formula: Sale Price
= Purchase Price plus the aggregate periodic profit
payments plus the Discounted Amount calculated at
the issue date of each relevant Sukuk issuance (if
applicable) and (b) the Sale Price calculated up to the
date of the date of the declaration of an Event of
Default shall be calculated based on the following
formula: Sale Price = Purchase Price plus the
aggregate periodic profit payments up to the date of
the declaration of an Event of Default plus the
Discounted Amount calculated at the issue date of
each relevant Sukuk issuance (if applicable).
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ICP/IMTN Programme Principal Terms and Conditions
Private and Confidential
The Sale Price payable for the IMTNs on the maturity
date or upon the declaration of an Event of Default
shall be calculated based on the following formula:
the Sale Price at issue date less (a) the aggregate
profit payments paid (if any), (b) the Redemption
Rebate (if applicable), (c) the Premium Amount (if
applicable) and (d) the Discounted Amount Rebate (if
applicable).
“Discounted Amount Rebate” means the difference
between (a) the Discounted Amount calculated up to
the maturity date and (b) the Discounted Amount
calculated up to an Event of Default, and only applies
in the case of an Event of Default and in the case of
IMTNs without periodic profit payments.
“Premium Amount” means the difference between the
Purchase Price of the relevant IMTN and the nominal
value of the relevant IMTN, in the case of IMTNs
issued at a premium.
In the case of ICPs
The Sale Price Payable for the ICPs on the maturity
date or upon the declaration of an Event of Default
shall be the nominal value (Purchase Price plus the
Discounted Amount) of the ICPs.
(c)
Programme Size
:
The aggregate nominal value of the Sukuk
outstanding under the ICP/IMTN Programme at any
point in time shall not exceed RM21.0 billion.
(d)
Issue Price
:
ICPs
The ICPs shall be issued at a discount to face value
and the issue price for each ICP issuance shall be
calculated in accordance with the Operational
Procedures for Securities Services issued by
Malaysian Electronic Clearing Corporation Sdn Bhd
(“MyClear”), as amended or substituted from time to
time (“MyClear Procedures”).
IMTNs
The IMTNs shall be issued at par, at a premium or at
a discount and the issue price for each IMTN
issuance shall be calculated in accordance with the
MyClear Procedures and/or such other rules and
procedures issued by Bursa Malaysia Securities
Berhad (“Bursa”) and/or such other regulatory
authorities as may be applicable from time to time.
(e)
Tenure
:
Tenure of the ICP/IMTN Programme
Fifty (50) years from the date of the first issue under
the ICP/IMTN Programme.
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ICP/IMTN Programme Principal Terms and Conditions
Private and Confidential
Tenure of the ICPs
The ICPs can be issued for any tenure of one (1),
three (3), six (6), nine (9) and up to twelve (12)
months as the Issuer may select, provided that the
maturity date of the ICPs shall not extend beyond the
tenure of the ICP/IMTN Programme.
Tenure of the IMTNs
The IMTNs shall have maturities of more than one (1)
year but not exceeding fifty (50) years provided that
the maturity date of the IMTNs shall not extend
beyond the tenure of the ICP/IMTN Programme.
(f)
Availability Period
:
Upon completion of documentation and, unless
waived by the JLAs, compliance of all conditions
precedent and ending on 5.00p.m. in Kuala Lumpur
on the final day of the Tenure of the ICP/IMTN
Programme.
(g)
Profit Rate (%)
:
ICPs
Not applicable.
IMTNs
To be determined prior to each issuance of the
IMTNs.
(h)
Profit Payment Frequency
and Profit Payment Basis
:
ICPs
Not applicable.
IMTNs
The profit payments for each IMTN issue shall be
payable in arrears on a semi-annual basis or such
other period to be agreed between the Issuer and the
JLAs and shall be calculated on an actual/365 days
basis.
(i)
Yield to Maturity
:
ICPs
To be determined prior to each issuance of the ICPs.
IMTNs
To be determined prior to each issuance of the
IMTNs.
(j)
Guarantee
:
An irrevocable and unconditional guarantee (“the
Guarantee”) by the Government in favour of the
Facility Agent (on behalf of the Sukukholders)
whereby the Government guarantees the proper and
punctual payment by DINB of the Guaranteed
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ICP/IMTN Programme Principal Terms and Conditions
Private and Confidential
Amount (as defined below) and irrevocably and
unconditionally undertakes, as a continuing obligation
to the Facility Agent, that if for any reason and at any
time and from time to time DINB fails to make
payment of the Guaranteed Amount when due, to
pay the amounts not so paid within thirty (30) days of
the written demand by the Facility Agent (“Payment
Period”).
“Guaranteed Amount” refers to monies and liabilities
which are now or shall at any time hereafter become
due, owing or payable or expressed to be due owing
or payable by DINB:
(1)
(2)
in relation to the ICP/IMTN Programme:
(a)
the nominal value of the Sukuk (or in
the case of IMTNs without periodic
profit payment, the accreted value of
the IMTNs); and
(b)
in the case of IMTNs with periodic
profit payments only, any accrued
profit thereon.
in relation to the SFF-i Facility, the Selling
Price,
Provided that:
(i)
the aggregate outstanding principal amount
under the SFF-i Facility guaranteed by the
Guarantor shall not exceed RM8.0 billion at
any one time;
(ii)
the combined aggregate outstanding nominal
value of the Sukuk and the outstanding
principal amount under the SFF-i Facility
guaranteed by the Guarantor shall not exceed
RM21.0 billion at any one time;
(iii)
any double-counting shall be disregarded; and
(iv)
the Guarantee Limit may, at the option of the
Guarantor, be reduced accordingly so long as
and subject to the Facility Agent’s confirmation
that, the combined aggregate of (i) the
outstanding nominal value of the Sukuk; (ii) the
outstanding principal amount under the SFF-i
Facility; (iii) the nominal value of any proposed
Sukuk issuance as notified by the Issuer to the
Facility Agent prior to the exercise of the
option; and (iv) the principal amount of any
proposed disbursement under the SFF-i
Facility as notified by the Issuer to the Facility
Agent prior to the exercise of the option, does
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ICP/IMTN Programme Principal Terms and Conditions
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not exceed the reduced Guarantee Limit.
“Guarantee Limit” means the total sum of
Ringgit Malaysia Twenty One Billion
(RM21,000,000,000.00) under the Guarantee.
(k)
Details of Utilisation of
Proceeds
:
To finance the following Shariah-compliant capital
expenditure and operating expenses in relation to the
development of the Klang Valley Mass Rapid Transit
project (“MRT Project”) including but not limited to the
following:(i)
Progressive payments to contractors;
(ii)
Purchase of equipments;
(iii)
Settlement of advances from any relevant
entities;
(iv)
Pre-construction costs including but not
limited to financing costs, financial advisor’s
fee, advisory costs and fees for solicitors,
project delivery partners and independent
consultant engineers;
(v)
All operating expenses including but not
limited to all pre-operating expenses, costs
relating to the tender process, administrative,
financial, legal and staff costs incurred by the
Issuer and/or MRT Corp in relation to the MRT
Project; and
(vi)
To refinance any bridging facility or other
credit lines undertaken by the Issuer in
relation to the MRT Project.
(l)
Rating
:
The ICP/IMTN Programme and the Sukuk issued
under the ICP/IMTN Programme will not be rated.
(m)
Form and Denomination
:
The Sukuk shall be issued in accordance with (1) the
“Participation and Operation Rules for Payment and
Securities Services issued by MyClear (“MyClear
Rules”), (2) MyClear Procedures, or their
replacement thereof (collectively the “MyClear Rules
and Procedures”) and/or (3) such other rules and
procedures issued by Bursa and/or such other
regulatory authorities as may be applicable from time
to time.
Each tranche of the Sukuk shall be represented by
global certificate(s) in bearer form to be deposited
with BNM and/or Bursa Depository, and is exchanged
for definitive bearer form only in certain limited
circumstances. The denomination of the Sukuk shall
be RM100 and the Sukuk shall be issued in multiples
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ICP/IMTN Programme Principal Terms and Conditions
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of RM1,000 at the time of issuance.
(n)
Status of the Sukuk
:
The Sukuk shall constitute direct, unconditional,
unsecured and unsubordinated obligations of DINB
and shall at all times rank pari passu, without
discrimination, preference or priority amongst
themselves and at least pari passu with all other
present and future unsecured and unsubordinated
obligations of DINB, subject to those preferred by law
and the Transaction Documents.
(o)
Status of the Guarantee
:
The liabilities of the Guarantor under the Guarantee
shall rank at least equally and rateably pari passu
with all its other unsecured liabilities, both actual and
contingent (except liabilities which are subject to liens
or rights of set-off wherein the aggregate amount of
which is not material).
(p)
Mode of Issue
:
ICPs
The ICPs may be issued through any of the following
modes to be determined by the Issuer and the JLAs:
(i)
(ii)
(iii)
via competitive tender;
via direct placement on a best effort basis; or
via bought deal basis.
IMTNs
The IMTNs may be issued through any of the
following modes to be determined by the Issuer and
the JLAs:
(i)
(ii)
(iii)
(iv)
(q)
Listing Status
:
via direct placement on a best effort basis;
via bought deal basis; or
via book running on a best effort basis; or
via issuance to retail investors including through
Exchange Traded Bonds.
ICPs
The ICPs will not be listed on any stock exchanges.
IMTNs
The IMTNs may be listed on Bursa.
(r)
Assets
:
A. Murabahah
Shariah-compliant and unencumbered assets which
may be in the form of land, buildings, structure,
shares, current assets, property (whether movable or
immovable property) and commodities (excluding
ribawi items in the category of medium of exchange
such as currency, gold and silver) and with an
ascribed value which is in compliance with the asset
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ICP/IMTN Programme Principal Terms and Conditions
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pricing requirements stipulated under the Guidelines
on Sukuk, owned by the Issuer, (and in case of
assets owned by the Issuer’s subsidiaries and/or third
party, the rights, interests and beneficial ownership
therein) and identified by the Joint Lead Arrangers
and the Issuer, and approved and endorsed by the
Shariah Adviser.
B. Murabahah (via a Tawarruq arrangement)
Shariah-compliant commodities available at Bursa
Suq Al-Sila’ as approved by its Shariah adviser
(excluding ribawi items in the category of medium of
exchange such as currency, gold and silver).
(s)
Conditions Precedent
:
The following in form and substance acceptable to
the JLAs:
1. All the Transaction Documents have been duly
executed by the parties thereto;
2. The delivery of the certified true copy of the
following documents of the Issuer:
a) Resolution from the Board of Directors of the
Issuer approving amongst others, the
ICP/IMTN Programme and execution of the
Transaction Documents;
b) Certified true copies of the Certificate of
Incorporation, Memorandum and Articles of
Association and latest Form 24 and Form 49
of the Issuer; and
c) List of authorised signatories of the Issuer and
their specimen signatures, duly certified by
the company secretary or any of its directors;
3. Letter of Confirmation from the Issuer to the
Facility Agent on the appointment of independent
consultant engineer by MRT Corp, to verify
progressive claims from contractors and to
monitor the construction progress of the MRT
Project;
4. Evidence in writing that the relevant approvals
and orders required have been obtained from the
Government and/or the Minister of Finance
(including under the Loans Guarantee (Bodies
Corporate) Act, 1965) and, where applicable, any
other regulatory authorities in respect of the
relevant tax and stamp duty exemptions and/or
remissions in respect of the Sukuk and the
ICP/IMTN Programme as advised by the
Solicitors acting for the JLAs as may be required
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ICP/IMTN Programme Principal Terms and Conditions
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for purposes of the Sukuk and the ICP/IMTN
Programme;
5. Evidence of confirmation from the Shariah
Adviser that the structure and mechanism of the
ICP/IMTN Programme and the Transaction
Documents are in compliance with Shariah;
6. Evidence that all transaction fees, costs and
expenses will be paid in full relating to the Sukuk
and the ICP/IMTN Programme;
7. The JLAs have received from their legal counsel
a legal opinion addressed to them and the Facility
Agent advising with respect to, among others, the
legality, validity and enforceability of the
Transaction Documents and a confirmation
addressed to the JLAs that all the conditions
precedent have been fulfilled;
8. Receipt of certificate from Issuer to confirm
among others representations and warranties are
true and accurate in all material respects and no
Events of Default has occurred and is continuing;
9. A report of the relevant company search of the
Issuer; and
10. A report of the relevant winding up search or the
relevant statutory declaration of the Issuer.
Additional conditions precedent for each issuance of
Sukuk under the ICP/IMTN Programme:
1. The JLAs shall have received satisfactory
confirmation from the Facility Agent on the
amount outstanding under the syndicated
revolving credit-i facility (“SFF-i Facility”) (if any)
and the ICP/IMTN Programme (if any); and
2. The JLAs shall have received satisfactory
confirmation from the Facility Agent and the
Issuer that (A) the aggregate of: (i) the
outstanding principal amount under the SFF-i
Facility and (ii) the principal amount to be
disbursed under the SFF-i Facility on the
proposed date of disbursement under the SFF-i
Facility does not exceed RM8.0 billion; and (B)
the aggregate of (i) the outstanding nominal value
of Sukuk issued under the ICP/IMTN Programme;
(ii) the outstanding principal amount under the
SFF-i Facility; (iii) the nominal value of the Sukuk
to be issued and (iv) the principal amount to be
disbursed under the SFF-i Facility on the
proposed date of issuance of the Sukuk and/or
the proposed date of disbursement under the
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ICP/IMTN Programme Principal Terms and Conditions
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SFF-i Facility (where applicable), does not
exceed RM21.0 billion.
(t)
Representations and
Warranties of the Issuer
:
The representations and warranties of the Issuer are
as follows:
1. It is a company duly established and existing
under Malaysian laws;
2. It has the power to enter into, exercise its rights
under and perform its obligations under the
Transaction Documents to which it is a party, its
Memorandum and Articles of Association
incorporate provisions which authorise, and all
necessary corporate action has been taken to
authorise the Issuer to exercise its right and to
perform its obligations under the Transaction
Documents to which it is a party;
3. All necessary authorisations, licences, and
consents required for its performance under the
Transaction Documents to which it is a party to
have been obtained, renewed, fulfilled and remain
in full force and effect to ensure the legality,
validity or enforceability in Malaysia of the
Transaction Documents to which it is a party in
accordance with their terms;
4. No registration and no payment of any duty or tax
or other action whatsoever is necessary to ensure
the validity, enforceability or admissibility as
evidence in Malaysia of the Transaction
Documents to which it is a party to;
5. Its entry into and the exercise of its rights under,
and performance of its obligations under the
Transaction Documents to which it is a party to,
do not and will not violate any law or any
provision contained in any agreement to which it
is a party;
6. No litigation or arbitration is current or, to its
knowledge, is threatened, which if adversely
determined will have a Material Adverse Effect;
For the purposes of this Principal Terms and
Conditions, “Material Adverse Effect” means an
event or an effect which will or may have a
material adverse effect on (i) the financial
condition of the Issuer; or (ii) the ability of the
Issuer to perform any of its obligations under any
of the Transaction Documents to which it is a
party;
7. It is subject to civil and commercial law with
respect to its obligations under the Transaction
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Documents to which it is a party to, the
transactions contemplated hereby and thereby
constitute private and commercial acts done for
private and commercial purposes and it is not
entitled to immunity on the grounds of sovereignty
or otherwise from any legal action or proceeding
(which may include, without limitation, suits,
attachment prior to judgment, execution or other
enforcement in Malaysia);
8. Each of the Transaction Documents to which it is
a party to is or will when executed and/or issued,
be in full force and effect and constitutes, or will
when executed or issued, constitutes its valid and
legally binding obligations enforceable in
accordance with its terms;
9. The Sukuk constitute direct, unconditional,
unsecured and unsubordinated obligations of the
Issuer and shall at all times rank pari passu
without discrimination, preference or priority
among themselves and at least pari passu with all
other unsecured and unsubordinated obligations
of the Issuer, subject to the provisions of the
Transaction Documents and those preferred by
law;
10. Its audited financial statements have been or will
be prepared in accordance with approved
accounting standards in Malaysia and together
with the notes thereto present a true and fair view
of the results of its operations for that year and
the state of its affairs at that date and have been
prepared, examined, reported on and approved in
accordance with all procedures required by its
memorandum and articles of association and the
laws of Malaysia and audited and certified by
qualified auditors;
11. The information furnished by the Issuer or on its
behalf and with the knowledge of the Issuer, in
connection with the ICP/IMTN Programme and
the Transaction Documents does not contain any
false or misleading statement or any material
omission and any opinions contained therein
were honestly made on reasonable grounds after
its due and careful enquiry; and
12. No Event of Default has occurred and is
continuing.
(u)
Events of Default
:
The Events of Default are as follows:
1. The Issuer fails to distribute/pay any amount in
respect of the ICP/IMTN Programme and/or the
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Transaction Documents as and when it falls due
or when demanded from the Issuer, under any of
the Transaction Documents;
2. The indebtedness of the Issuer under the SFF-i
Facility becomes capable, in accordance with the
relevant terms thereof, of being declared due
prematurely by reason of a default by the Issuer
in its obligations in respect of the same, or the
Issuer fails to make any payment in respect
thereof on the due date for such payment or if
due on demand when demanded or the Security
Interest created for any such indebtedness
becomes enforceable and such declaration of
indebtedness being due or payable or demanded
is not discharged or disputed in good faith by the
Issuer in a court of competent jurisdiction within
thirty (30) days from the date of such declaration
or demand;
For the purposes of this Principal Terms and
Conditions, “Security Interest” means any
encumbrance, mortgage, charge (whether fixed or
floating), pledge, lien, hypothecation, assignment
by way of security, trust arrangement for the
purpose of providing security or other security
interest of any kind including without limitation,
title transfer and/or retention arrangements having
a similar effect or any agreement to create any of
the foregoing.
3. Any representation or warranty made or given by
the Issuer in any of the Transaction Documents to
which it is a party to or which is contained in any
certificate, document or statement furnished at
any time pursuant to the terms of the Sukuk
and/or any of the Transaction Documents to
which it is a party to proves to have been
incorrect or misleading in any material respect on
or as of the date made or given or deemed made
or deemed given;
4. Any representation or warranty made or given by
the Guarantor under the Government Guarantee
proves to have been incorrect or misleading in
any material respect on or as of the date made or
given or deemed made or deemed given;
5. The Issuer fails to observe or perform any of its
obligations under any of the Transaction
Documents or the Sukuk or under any
undertaking or arrangement entered into in
connection therewith other than an obligation of
the type referred to in paragraph 1. of this section
above and such failure shall continue for a period
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of sixty (60) days or more from the date the Issuer
receives written notification by the Facility Agent
of the failure;
6. Any step or action is taken for the bankruptcy,
winding up, dissolution or liquidation of the Issuer
(including without limitation, the presentation of a
petition for the bankruptcy of or winding up
against the Issuer or the making of any order or
the passing of any resolution for the winding up,
dissolution or liquidation of the Issuer) unless
such petition or order has been struck out,
withdrawn, set aside or stayed within sixty (60)
days of the petition or order being served on the
Issuer;
7. Any consent, authorisation, licence or approval or
declaration to governmental or public bodies or
authorities required by the Issuer to authorise or
required by the Issuer in connection with the
execution, issue, delivery, validity, legality,
enforceability or admissibility in evidence of any
of the Transaction Documents or the performance
by the Issuer of its obligations under any of the
Transaction Documents as the case may be, is
not approved or is revoked or expired or is not
renewed or otherwise ceases to be in full force
and effect and such non-approval, revocation,
expiration, or non-renewal continues for thirty (30
days or more from the date the Issuer has been
notified in writing by the Facility Agent of such
failure, unless in respect of the afore going, such
non-approval, revocation, expiration, or nonrenewal will not have a Material Adverse Effect;
8. At any time any provision of any of the
Transaction Documents relating to the payment
obligations of the Issuer and/or the Guarantor is
or becomes, for any reason, invalid, illegal, void,
voidable or unenforceable;
9. The Issuer enters into any composition or
arrangement with or for the benefit of its creditors
(including pursuant to Section 176 of the
Companies Act 1965) or a moratorium is agreed
or declared in respect of or affecting all or a
substantial part of any of its financings (whether
conventional or based on Shariah principles);
10. The Issuer or the Guarantor repudiates any of the
Transaction Documents or the Issuer or the
Guarantor does or causes to be done any act or
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thing to repudiate any of the Transaction
Documents to which it is a party.
(x)
Covenants
:
The covenants of the Issuer are as follows:
1. The Issuer shall ensure that its directors shall, at
some date no later than thirty (30) days after the
audited financial results of DINB have become
available (which shall be available no later than
one hundred and eighty (180) days after the end
of its financial year), cause to be made out and
lodged with the Companies Commission of
Malaysia and delivered to the Facility Agent the
audited profit and loss account and the audited
balance sheet as at the end of the financial year
to which the audited profit and loss account
relates;
2. The Issuer shall immediately notify the Facility
Agent and the Government as soon as it
becomes aware of:
(i)
any Event of Default;
(ii)
any Material Adverse Effect on the Issuer;
or
(iii)
any other matters that may materially
prejudice the interests of the Sukuk
holders or any of them.
3. So far as is required by law, the Issuer shall
execute all such further documents and do all
such further acts and things as may be necessary
at any time or times to give further effect to the
terms and conditions of the Transaction
Documents to which it is a party;
4. The Issuer shall carry out its business and affairs
in a proper and efficient manner;
5. The Issuer shall promptly perform and carry out
all its obligations under the Transaction
Documents to which it is a party and the terms
and conditions of the Sukuk (including but not
limited to redeeming the Sukuk on the relevant
maturity date(s) or any other date on which the
Sukuk are due and payable) and ensure that it
shall immediately notify the Facility Agent in the
event that the Issuer is unable to fulfil or comply
with any of the provisions of the Transaction
Documents;
6. The Issuer shall promptly comply with all
applicable laws, regulations and guidelines
relating to the entry into and performance by the
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ICP/IMTN Programme Principal Terms and Conditions
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Issuer of its obligations under the Transaction
Documents to which it is a party;
7. The Issuer will promptly give to the Facility Agent
any information as the Facility Agent may
reasonably require relating to its affairs in
connection with the performance of its duties and
the exercise of its powers to the extent permitted
under the law;
8. The Issuer will instruct its auditors to disclose to
the Facility Agent such information as the Facility
Agent may reasonably require in connection with
any calculation or matter arising under the
Transaction Documents or as the Facility Agent
may reasonably require for the purpose of
performing its duties and exercising its powers as
Facility Agent;
9. The Issuer shall comply with its obligations under
the Central Securities Depository and Paying
Agency Rules issued by MyClear, as modified or
revised or substituted from time to time by
MyClear and without prejudice to the generality of
the foregoing, maintain at all times a paying agent
with a specified office in Malaysia in respect of
payments in relation to the Sukuk in accordance
with the relevant laws and regulations;
10. The Issuer shall obtain and promptly renew from
time to time, and to the extent permitted by law,
promptly deliver or procure the delivery to the
Facility Agent upon demand certified true copies
of any and all licences, authorisations, approvals,
consents and exemptions as may be necessary
or desirable to ensure the validity, enforceability
or priority of its liabilities and obligations or the
rights of the Sukukholders (or any of them) under
the Transaction Documents, and shall comply
with the terms of the same;
11. The Issuer shall utilise the proceeds from the
ICP/IMTN Programme in accordance with the
purposes as set out herein;
12. The Issuer shall ensure that (A) the aggregate of:
(i) the outstanding principal amount under the
SFF-i Facility and (ii) the principal amount to be
disbursed under the SFF-i Facility on the
proposed date of disbursement under the SFF-i
Facility does not exceed RM8.0 billion; and (B)
the aggregate of (i) the outstanding nominal value
of Sukuk issued under the ICP/IMTN Programme;
(ii) the outstanding principal amount under the
SFF-i Facility, (iii) the nominal value of the Sukuk
to be issued and (iv) the principal amount to be
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ICP/IMTN Programme Principal Terms and Conditions
Private and Confidential
disbursed under the SFF-i Facility on the
proposed date of issuance of the Sukuk and/or
the proposed date of disbursement under the
SFF-i Facility (where applicable), does not
exceed RM21.0 Billion; and
13. The Issuer shall not (without the prior written
consent of the Facility Agent and which shall not
be unreasonably withheld), reduce or in any way
whatsoever alter except increase, its authorised
or paid-up capital whether by varying the amount,
structure or value thereof or the rights attached
thereto or convert any of its share capital into
stock, or by consolidation, dividing or sub-dividing
all or any of its shares or add to, delete or amend
its Memorandum and Articles of Association in a
manner inconsistent with the Transaction
Documents.
(y)
Other terms and conditions
of the issue
(i)
Transferability
:
The Sukuk are transferable.
(ii)
Redemption
:
Unless previously redeemed, purchased or
cancelled, all outstanding Sukuk will be redeemed by
the Issuer at 100% of their nominal value on their
respective maturity dates.
(iii)
Repurchase and
Cancellation
:
The Issuer may at any time purchase the Sukuk at any
price in the open market or by private treaty, but these
repurchased Sukuk shall be cancelled and cannot be
reissued.
(iv)
Transaction
Documents
:
(a) Programme Agreement;
(b) Agency Agreement;
(c) Supplemental Agency Agreement;
(d) Second Supplemental Agency Agreement;
(e) Government Guarantee;
(f) Securities Lodgement Form;
(g) Tender Panel Agreement; and
(h) other relevant agreements agreed between the
parties that may be required to complete the
ICP/IMTN Programme as advised by the JLAs’
legal counsel and agreed by the Issuer.
(v)
Taxation
:
All payments by the Issuer shall be made without
withholding or deductions for or on account of any
present or future tax, duty or charge of whatsoever
nature imposed or levied by or on behalf of Malaysia
or any other applicable jurisdictions, or any authority
thereof or therein having power to tax, unless such
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ICP/IMTN Programme Principal Terms and Conditions
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withholding or deduction is required by law (in which
event the Issuer shall be required to make such
additional amount so that the payee would receive
the full amount which the payee would have received
if no such withholding or deductions are made)
Provided That no such additional amount shall be
payable in respect of any Sukuk presented for
payment:(1)
by or on behalf of a payee who is liable to
such taxes, duties, assessments or
governmental charges in respect of such
Sukuk by reason of it being a non-resident of
Malaysia for tax purposes; or
(2)
by or on behalf of a payee who would not be
liable or subject to such withholding or
deduction by making declaration of residence
in Malaysia or other similar claim for
exemption to the relevant tax authority; or
(3)
more than thirty (30) days after the Relevant
Date, unless the payee is entitled to such
additional amount upon presentation of such
Sukuk for payment on the last day of such
period of thirty (30) days.
For the avoidance of doubt, paragraph (3) shall not
apply to such payee falling under paragraphs (1) or
(2) above.
For the purpose of this term sheet, “Relevant Date”
shall mean the date on which the payment first
become due but, if the full amount of the money
payable has not been received by the Facility Agent
on or before the due date, it shall mean the date on
which, the full payment of money having been so
received.
(vi)
Governing Laws
:
Laws of Malaysia.
(vii)
Jurisdiction
:
DINB shall unconditionally and irrevocably submit to
the exclusive jurisdiction of the courts of Malaysia.
(viii)
Special Condition
:
The Issuer shall ensure and/or procure that the
Minister of Finance (Incorporated) holds directly
and/or indirectly at least fifty one per centum (51%)
of the ordinary paid-up share capital of the Issuer at
all times.
(ix)
Increase
in :
Programme Limit
The limit of the ICP/IMTN Programme of Ringgit
Malaysia Twenty One Billion (RM21,000,000,000.00)
in nominal value may, at the option of the Issuer, and
without further reference to or consent by the
Sukukholders, be increased to an amount exceeding
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ICP/IMTN Programme Principal Terms and Conditions
Private and Confidential
Ringgit
Malaysia
Twenty
One
Billion
(RM21,000,000,000.00) in nominal value, provided
that any Sukuk issued pursuant to the increased limit
shall be irrevocably and unconditionally guaranteed
by the Government.
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Private and Confidential
Annexure 1
Sukukholders
4
Periodic Profit Payment/
One-off Payment
Facility Agent
(acting on behalf of the
Sukukholders)
3
Sale
Price
1
Purchases
Assets
3
Sells
Assets
2
2
Proceeds
Issues Sukuk
1
Purchase
Price
DINB
Step 1
From time to time, DINB and the Facility Agent (acting on behalf of the
Sukukholders) will execute an asset purchase agreement (“Purchase
Agreement”) under which the Facility Agent shall purchase certain Shariahcompliant assets (“Assets”) from DINB for an asset purchase price
(“Purchase Price”). The Purchase Price will be the amount to be disbursed
under the Sukuk and will be in compliance with the asset pricing requirements
under the Securities Commission Malaysia (“SC”)’s Guidelines on Sukuk
(revised and effective on 8 January 2014) as may be amended from time to
time (“Guidelines on Sukuk”).
Step 2
The Issuer shall then issue Sukuk to evidence the Sukukholders’ ownership
of the Assets and thereafter, upon the onward sale of the Assets to DINB, the
Sale Price and the rights of the Sukukholders via the Facility Agent under the
Sale Agreement. The proceeds received from the Sukukholders shall be used
by the Facility Agent to pay the Purchase Price.
Step 3
Pursuant to a Murabahah arrangement (“Murabahah Arrangement”), the
Facility Agent (acting on behalf of the Sukukholders) will then sell the Assets
to DINB via a sale agreement (“Sale Agreement”) for an asset sale price
(“Sale Price”), which shall be paid by DINB on a deferred basis and shall be
evidenced by the Sukuk.
Step 4
The Sale Price will represent the Purchase Price plus the applicable profit
margin i.e. the aggregate periodic profit payments based on a fixed profit rate
to be agreed at the time of issuance (if applicable) plus the Discounted
Amount calculated at the issue date of each relevant Sukuk issuance (if
applicable).
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DINB (as part of its obligation to pay the Sale Price) shall make periodic profit
payments in the case of IMTNs with profit payments or one-off payment to the
Sukukholders in the case of Sukuk without periodic profit payments (“One-off
Payment”). At (i) the maturity date of the Sukuk; or (ii) upon the declaration of
an Event of Default whichever is earlier, DINB (as part of its obligation to pay
the Sale Price) will pay the Sukukholders all amounts then outstanding on the
Sale Price as final settlement of the same subject to the Redemption Rebate
(if applicable), upon which the Sukuk will be cancelled.
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Annexure 2
Facility Agent
(acting on behalf
of Sukukholders)
7
Periodic
Profit
Payment/
One-off
Payment
DINB
(Purchase
Agent)
2
Issue Sukuk
Purchase Order
6
CTP Sale
Agreement
Commodity
Buyer
Step 2
Agency
Agreement
Sukuk Proceeds
1
DINB
(Issuer /
Purchaser)
Step 1
1
5
Sell
Commodities
at Deferred
Sale Price
Facility Agent
(Sub Agent)
3
CTP
6
Sell
Commodities
on spot
Bursa Suq
Al-Sila’
Sub Agency
Agreement
1
3
CTP Purchase
Agreement
Commodity
Seller
Sell
Commodities
on spot
The Facility Agent, on behalf of the Sukukholders, and the Issuer shall enter
into an agency agreement (“Purchase Agency Agreement”), pursuant to
which the Issuer is appointed as the agent of the Sukukholders (in such
capacity, the “Purchase Agent”) for the purchase of Shariah-compliant
commodities which would exclude ribawi items in the category of medium of
exchange such as currency, gold and silver (“Commodities”). The Purchase
Agent shall then enter into a sub-agency agreement (“Sub Agency
Agreement”) to appoint the Facility Agent as a sub agent (in such capacity,
the “Sub Agent”) to purchase the Commodities.
Pursuant to a commodity Murabahah master agreement (“Commodity
Murabahah Master Agreement”), prior to the date on which the relevant
tranche of Sukuk is issued, the Issuer (as “Purchaser“) shall, from time to
time, issue a purchase order (“Purchase Order”) in relation to the said tranche
to the Purchase Agent and the Sub Agent. In the Purchase Order, the
Purchaser will request the Purchase Agent and the Sub Agent to purchase
the Commodities. The Purchaser shall irrevocably undertake to purchase the
Commodities from the Sukukholders via the Sub Agent at the sale price
(“Sale Price”) on a deferred basis.
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Step 3
Private and Confidential
The Sub Agent pursuant to an agreement (“CTP Purchase Agreement”) to be
entered into between the Sub Agent and the commodity trading participant
(“CTP”), will appoint the CTP to purchase the Commodities on a spot basis
from the commodity supplier(s) in the Bursa Suq Al Sila’ (“Commodity
Seller(s)”) at a purchase price (“Purchase Price”) which shall be an amount
equivalent to the Sukuk proceeds. The Purchase Price shall be in line with the
asset pricing requirements stipulated under the Guidelines on Sukuk.
Step 4
The Issuer shall issue the Sukuk to the Sukukholders whereby the proceeds
thereof shall be used to pay for the Purchase Price. The Sukuk shall
evidence, amongst others, the Sukukholders’ ownership of the Commodities
and subsequently once the Commodities are sold to the Purchaser, the
Sukukholders’ entitlement to receive the Sale Price.
Step 5
Thereafter, pursuant to a sale and purchase agreement (“Sale and Purchase
Agreement”), the Sub Agent (acting on behalf of the Purchase Agent as agent
to the Sukukholders) shall sell the Commodities to the Purchaser based on
the Murabahah principle at the Sale Price.
Step 6
Upon completion of such sale the Purchaser, pursuant to an agreement
(“CTP Sale Agreement”) entered into between the Purchaser and the CTP,
shall appoint the CTP to sell the Commodities to Bursa Malaysia Islamic
Services Sdn. Bhd. (“Commodity Buyer”) on a spot basis for an amount equal
to the Purchase Price.
The Sale Price will represent the Purchase Price plus the applicable profit
margin i.e. the aggregate periodic profit payments based on a fixed profit rate
to be agreed at the time of issuance (if applicable) plus the Discounted
Amount calculated at the issue date of each relevant Sukuk issuance (if
applicable).
Step 7
DINB (as part of its obligation to pay the Sale Price) shall make periodic profit
payments in the case of IMTNs with profit payments or one-off payment to the
Sukukholders in the case of Sukuk without periodic profit payments (“One-off
Payment”). At (i) the maturity date of the Sukuk; or (ii) upon the declaration of
an Event of Default whichever is earlier, DINB (as part of its obligation to pay
the Sale Price) will pay the Sukukholders all amounts then outstanding on the
Sale Price as final settlement of the same subject to the Redemption Rebate
(if applicable), upon which the Sukuk will be cancelled.
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