Digital services company MY EG Services (MYEG), the concessionaire for Malaysia’s Electronic Government Multimedia Super Corridor flagship application, issued RM300 million (US$64.12 million)-worth of sustainability Sukuk in August 2023 to fund a blockchain project.
The two three-year facilities were floated under MYEG’s RM1 billion (US$213.73 million) Sukuk Wakalah program, which allows it the flexibility to issue sustainability Sukuk.
The proceeds from the facilities will be channelled toward the development and deployment of Zetrix, a Layer-1 public blockchain platform, a spokesperson from MYEG told ISFI, a sister publication of IFN Fintech. The platform will facilitate the regional comprehensive economic partnership, a free trade agreement comprising 15 member countries.
In addition to funding the development of the platform, the Sukuk proceeds will finance the construction of foreign worker hostels.
MYEG’s August 2023 papers feature two three-year issuances both carrying semi-annual coupon rates of 5.4%. Representing the company’s fourth and fifth issuances, the facilities were arranged by CIMB Investment Bank and HSBC Amanah as the joint lead arrangers.
As part of its role as a government concessionaire, MYEG builds, operates and owns the electronic channel to deliver services from a number of government agencies, including the Road Transport Department, the Immigration Department and the Ministry of Health, to Malaysian citizens and businesses.
In February this year, MARC Ratings, which gave the Sukuk program an ‘AA-IS’ rating, highlighted the company’s reliance on its concessionaire agreements with government agencies following the announcement that immigration-related services and processes will be directly undertaken in-house by the Immigration Department from 2025 onward.
In May this year, MYEG’s previous concession agreement with the Immigration Department was renewed for another three-year period.
Notwithstanding the renewal of MYEG’s agreement with the Immigration Department, the rating agency remarked in a statement that: “MYEG remains exposed to renewal and termination risks as well as regulatory changes.”
MARC Ratings also awarded a ‘Gold’ impact assessment to MYEG’s Sustainability Financing Framework, which outlines its use of funds for sustainability issuances. As per the rating agency, the projects financed under the framework will be aligned with the UN SDGs and the circular economy concept.
MYEG is listed on the Main Board of Bursa Malaysia and has been included in the FTSE4Good Bursa Malaysia Index since 2017. The index is a joint effort between FTSE Russell and Bursa Malaysia to support investors in making ESG investments in Malaysian listed companies.
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MYEG’s August 2023 Issuances RM300 million (US$64.12 million)  21st August 2023 |
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| Summary of terms and conditions | |
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Issuer |
MY EG Services |
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Size of issue |
Tranche 1: RM250 million (US$53.43 million) Tranche 2: RM50 million (US$10.69 million) |
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Mode of issue |
Private placement, bought deal, bookbuilding |
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Tenor |
Tranche 1: Three years Tranche 2: Three years |
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Profit rate |
Tranche 1: 5.4% Tranche 2: 5.4% |
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Payment |
Semi-annual |
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Currency |
Malaysian ringgit |
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Maturity date |
Tranche 1: 21st August 2026 Tranche 2: 11th August 2026 |
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Lead arranger(s) |
CIMB Islamic Bank and HSBC Amanah |
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Principal advisor(s) |
CIMB Islamic Bank and HSBC Amanah |
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Sustainability structuring agent(s) |
CIMB Islamic Bank and HSBC Amanah |
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Governing law |
Malaysian law |
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Legal advisor(s)/council |
Zaid Ibrahim & Co |
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Islamic structure |
Wakalah Bi Istithmar, Murabahah (via Tawarruq arrangement) |
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Listing |
Bursa Malaysia |
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Underlying asset |
Shariah compliant commodities |
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Rating |
‘AA-IS’ by MARC Ratings |
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Shariah advisor(s) |
Shariah advisory boards of CIMB Islamic Bank and HSBC Amanah |
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Tradability |
Yes |