1MDB: Takaful Malaysia confirms buying RM85 million sukuk bond from TIA

Syarikat Takaful Malaysia Bhd today confirmed the purchase of a RM85 million Islamic Bond in 2009 from the Terengganu Investment Authority (TIA), now known as 1Malaysia Development Bhd (1MDB).

"It was purchased when the TIA issued the bond and this was prior to 1MDB coming in existence," Group Managing Director, Datuk Seri Mohamed Hassan Kamil said.

The bond is fully guaranteed by the government and matures in 2039, he told reporters after BIMB Holdings Bhd's annual general meeting here.

Takaful Malaysia is a unit under BIMB.

Hassan said the firm decided to invest in the bond, which has a coupon rate of 5.25 per cent, because it was a 30-year tenure.

"As you know insurance liabilities are long term, so we are required to match our assets and liabilities. At the time, the sukuk was the only issuance with such a long tenure," he said.

On average, bonds are offered at a maximum of 20 years.

However, he said the bond's exposure was small and does not pose any significant risk to the company's balance sheet.

"As of 2014, Takaful Malaysia's asset base was RM7.1 billion and the RM85 million only represents two or three per cent of the total assets," he said.