SUCCESSFUL COMPLETION OF SAMURAI BOND ISSUANCE BY THE GOVERNMENT OF MALAYSIA
YB LIM GUAN ENG
FINANCE MINISTER OF MALAYSIA
18 MARCH 2019
His Excellency Dr Makio Miyagawa,
The Japanese Ambassador to Malaysia
YB Datuk Seri Saifuddin Nasution Bin Ismail,
Minister of Domestic Trade and Consumer
YB Dato’ Amiruddin Hamzah,
Deputy Finance Minister
YBhg Datuk Ahmad Badri Mohd Zahir,
Treasury Secretary General
YBhg Datuk Siti Zauyah Md Desa,
Deputy Treasury Secretary General
Mr Hironori Oka,
Chairman of Daiwa Capital Markets Singapore Ltd
Mr Shojiro Mizoguchi,
CEO of Mizuho Bank (Malaysia) Bhd
Mr Alvin Kong,
Head of Global Markets Malaysia, HSBC Bank Malaysia
Ladies and gentlemen,
Good afternoon and Salam Harapan,
INTRODUCTION: DETAILS OF THE SAMURAI BOND
1. I am pleased to share that the Government of Malaysia last Friday 15 March 2019 had successfully issued our 10-year JPY200 billion (RM7.3 billion) guaranteed by the Japan Bank for International Cooperation (JBIC), a Japanese public finance institution wholly owned by the Japanese government that was established to promote economic cooperation.
2. This is a landmark transaction for a number of reasons:
- First, the issuance is the largest JBIC-guaranteed sovereign bond issuance in the Japanese Yen bond market;
- Second, this is the first JBIC guarantee undertaken by the Government of Malaysia; and
- Third, this marks the Government’s return to the Japanese Yen bond market after a 30-year absence. The last issuance before this was in 1989.
3. The Samurai Bond has been extremely well received by Japanese investors. During a four-day marketing period between 4th to 7th March, we received a total interest amounting to JPY324.7 billion (RM11.9 billion), which translated into an oversubscription of 1.6 times.
4. And the bond has a diversified investor base in Japan. I myself visited Tokyo for a Non-Deal Roadshow in early February when I met with several large Japanese investing institutions. I am happy to learn some of those who we met participated in this transaction, and Malaysia hopes to expand and build long-term relationships with these large reputable Japanese investors.
5. The strong interest from Japanese investors had enabled the Samurai Bond to be priced competitively, with an overall cost to the Government at 0.63% per annum, which is lower than our initial projection of 0.65%.
6. This is testament to Japanese investors’ confidence in the Malaysian economy and the fiscal reforms carried out by the Government. The Government of Malaysia is firmly committed to fiscal sustainability in order to strengthen our resilience and achieve sustainable as well as equitable growth for all Malaysians.
CLOSE TIES BETWEEN MALAYSIA AND JAPAN
7. Since the launch of the Look East Policy more than 35 years ago, Japan and Malaysia have enjoyed warm bilateral relations and we remain as close economic partners.
8. The Samurai Bond issuance was a direct result of Tun Dr Mahathir’s working visit to Japan last November. During the meeting between Prime Minister Shinzo Abe and Prime Minister Tun Dr Mahathir, the Japanese Government had graciously offered to guarantee the Samurai Bond.
9. The Government of Malaysia would like to express its appreciation to Prime Minister Shinzo Abe and the Japanese Government. I would also like to express my gratitude to His Excellency Dr Makio Miyagawa for his constant support throughout the process.
10. Before I end my speech today, we would also like to take the opportunity to thank the joint lead arrangers for Samurai bond – Mizuho, HSBC and Daiwa (in partnership with Affin Hwang) – for their efforts in successfully arranging this landmark Samurai Bond issuance.