S&P assigns 'A-' for Malaysia Sukuk Global's proposed sukuk trust certificates

Standard & Poor's Ratings Services (S&P) has assigned preliminary 'A-' issue rating to the proposed US dollar denominated sukuk trust certificates to be issued by Malaysia Sukuk Global Bhd.

Malaysia Sukuk Global is a special-purpose entity set up to act as a financing vehicle for the government of Malaysia.

In a statement today, S&P said, the issuer will sign a wakala agreement with the Malaysian government.

"In addition to the wakala agreement, the issuer will enter into a voucher purchase agreement," it said.

S&P said the rating on the proposed sukuk trust certificates reflected the foreign currency rating on Malaysia because the transaction fulfilled the five conditions of its criteria for rating sukuk.

"One of the criteria was Malaysia will provide sufficient and timely contractual obligations for the repayment of the periodic distribution amounts through the wakala agreement.

"Another is that under the agency agreement, Malaysia will undertake to cover all the costs related to the transaction," it said.