Maybank Islamic Berhad Sukuk ICP/IMTN Programme MYR 10,000,000,000 - Information Memorandum

Transcription

1. This Information Memorandum is not an offer to sell securities and is not soliciting an offer to buy securities described herein in any jurisdiction where the offer or sale is not permitted . Strictly Private & Confidential INFORMATION MEMORANDUM MAYBANK ISLAMIC BERHAD (Company No. 787435-M) PROPOSED ISSUANCE OF ISLAMIC COMMERCIAL PAPERS AND ISLAMIC MEDIUM TERM NOTES PURSUANT TO AN ISLAMIC COMMERCIAL PAPER / ISLAMIC MEDIUM TERM NOTE PROGRAMME OF UP TO RM10.0 BILLION IN NOMINAL VALUE UNDER THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR Principal Adviser, Lead Arranger and Lead Manager MAYBANK INVESTMENT BANK BERHAD (Company No. 15938-H) 2 December 2016
2. Maybank Islamic Berhad Information Memorandum RM10 ,000,000,000 ICP/IMTN Programme RESPONSIBILITY STATEMENT This Information Memorandum has been approved by the directors of Maybank Islamic Berhad (“Maybank Islamic” or the “Issuer” or the “Bank”) and they collectively and individually accept full responsibility for the accuracy of the information given and confirm that, after having made all reasonable enquiries in the circumstances, and to the best of their knowledge, information and belief, there are no false or misleading statements or other material facts the omission of which would make any statement in this Information Memorandum false or misleading and that there are no material omissions in this Information Memorandum in the context of the issue, offer, sale or invitation to subscribe or purchase the Islamic commercial papers (“ICPs”) or the Islamic medium term notes (“IMTNs”) (the ICPs and the IMTNs are collectively referred to as the “Sukuk Wakalah”) under the Islamic commercial paper/Islamic medium term note programme of up to RM10.0 billion in nominal value under the Shariah principle of Wakalah Bi Al-Istithmar to be established by the Issuer (“ICP/IMTN Programme”). The opinions expressed in this Information Memorandum with regard to the Issuer have been reached after considering all relevant circumstances and are based on reasonable assumptions. Enquiries have been made by the Issuer to ascertain all material facts and to verify the accuracy of all such information and statements. In this context, the Issuer accepts responsibility for such information contained in this Information Memorandum. IMPORTANT NOTICE AND GENERAL STATEMENTS OF DISCLAIMER This Information Memorandum is provided to prospective investors by the Issuer on a private and confidential basis for use solely in connection with the issue, offer, sale or invitation to subscribe or purchase the Sukuk Wakalah under the ICP/IMTN Programme. The Issuer has authorised Maybank Investment Bank Berhad (Company No. 15938-H) as principal adviser, lead arranger and lead manager (“Lead Arranger”) to distribute this Information Memorandum, which is now being provided by the Lead Arranger on a confidential basis to potential investors for the sole purpose of assisting them to decide whether to subscribe or purchase the Sukuk Wakalah. The Sukuk Wakalah shall not be issued, offered, sold, transferred or otherwise disposed, directly or indirectly in Malaysia other than to persons falling within any of the categories of persons specified in Part 1 of Schedule 6 (or Section 229(1)(b)) and Part 1 of Schedule 7 (or Section 230(1)(b)), read together with Schedule 9 (or Section 257(3)) of the Capital Markets and Services Act, 2007 (as may be amended from time to time) (“CMSA”), if they consider purchasing the Sukuk Wakalah at issuance and Part 1 of Schedule 6 (or Section 229(1)(b)), read together with Schedule 9 (or Section 257(3)) of the CMSA if they consider purchasing the Sukuk Wakalah after issuance. Further, as the IMTNs have been accorded a rating of AAA by RAM Rating Services Berhad (“RAM”), the issuance of, offer for subscription or purchase of, or invitation to subscribe for the IMTNs falls within Paragraph 12, Schedule 8 (or Section 257(1)) of the CMSA. This Information Memorandum shall not be, in whole or in part, reproduced or used for any other purpose, or shown, given, copied to or filed with any other person including, without limitation, any government or regulatory authority except with the prior written consent of the Issuer or the Lead Arranger unless as may be required under Malaysian laws, regulations and/or guidelines. The ICPs have been accorded a short-term rating of P1 and the IMTNs have been accorded a long-term rating of AAA by RAM. A rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the rating agency. The Lead Arranger has not verified the information contained herein. The Lead Arranger does not accept any responsibility for the information and data contained in this Information Memorandum and no responsibility or liability is accepted by the Lead Arranger as to the adequacy, legality, effectiveness, validity, genuineness, enforceability, admissibility, reasonableness, authenticity, origin, i
3. Maybank Islamic Berhad Information Memorandum RM10 ,000,000,000 ICP/IMTN Programme validity, accuracy or completeness of such information and data or for any other information, data or statement provided by the Issuer or made or purported to be made by the Lead Arranger or on its behalf in connection with the Issuer, its future performance, or the issue and offering or distribution of the Sukuk Wakalah. The Lead Arranger accordingly disclaims all and any liability whether arising in tort or contract or otherwise which it might otherwise have in respect of this Information Memorandum or any such statement. No statement, representation, warranty or undertaking, express or implied, is made, given or assumed by the Lead Arranger as to the authenticity, origin, validity, accuracy or completeness of such information and data or that the information or data remains unchanged in any respect after the relevant date shown in this Information Memorandum. No person is authorised to give any information or data or to make any representation or warranty other than as contained in this Information Memorandum and, if given or made, any such information, data, representation or warranty must not be relied upon as having been authorised by the Issuer, the Lead Arranger or any other person. This Information Memorandum has not been and will not be made to comply with the laws of any jurisdiction other than Malaysia (“Foreign Jurisdiction”), and has not been and will not be lodged, registered or approved pursuant to or under any legislation (or with or by any regulatory authorities or other relevant bodies) of any Foreign Jurisdiction and it does not constitute an issue, offer or sale of, or an invitation to subscribe for or purchase the Sukuk Wakalah or any other securities of any kind by any party in any Foreign Jurisdiction. This Information Memorandum is not intended to be a prospectus and has not been registered or lodged under the laws of Malaysia or of any Foreign Jurisdiction as a prospectus. Unless otherwise specified in this Information Memorandum, the information contained in this Information Memorandum is current as at the date hereof. No action has been or will be taken in any country or jurisdiction by the Issuer or the Lead Arranger that would permit an issue or offering or an invitation to subscribe for or purchase the Sukuk Wakalah, or possession or distribution of any offering material in relation thereto, in any country or jurisdiction where action for that purpose is required. Persons into whose hands this Information Memorandum comes are required by the Issuer and the Lead Arranger to comply with all applicable laws and regulations in each country or jurisdiction in or from which they purchase, offer, sell or deliver the Sukuk Wakalah or have in their possession or distribute such offering material, in all cases at their own expense. The distribution or possession of this Information Memorandum in or from certain Foreign Jurisdictions may be restricted or prohibited by law. Each recipient is required to seek appropriate professional advice regarding, and to observe, any such restriction or prohibition. Neither the Issuer nor the Lead Arranger accepts any responsibility or liability to any person in relation to the distribution or possession of this Information Memorandum in or from any such Foreign Jurisdiction. None of the Issuer and the Lead Arranger represents that the Sukuk Wakalah may at any time lawfully be sold in compliance with any applicable registration or other requirements in any jurisdiction, or pursuant to any exemption available thereunder, or assumes any responsibility for facilitating such sale. By accepting delivery of this Information Memorandum, each recipient agrees to the terms upon which this Information Memorandum is provided to such recipient as set out in this Information Memorandum, and further agrees and confirms that: (a) it will keep confidential all of such information and data and will not reproduce it howsoever and whatsoever manner, without the consent of the Issuer and the Lead Arranger; (b) it is lawful for the recipient to subscribe for or purchase the Sukuk Wakalah in all jurisdictions to which the recipient is subject; ii
4. Maybank Islamic Berhad Information Memorandum RM10 ,000,000,000 ICP/IMTN Programme (c) the recipient has complied with all applicable laws in connection with such subscription or purchase of the Sukuk Wakalah; (d) the Issuer, the Lead Arranger and their respective directors, officers, employees and professional advisers are not and will not be in breach of the laws of any jurisdiction to which the recipient is subject as a result of such subscription or purchase of the Sukuk Wakalah, and they shall not have any responsibility or liability in the event that such subscription or purchase of the Sukuk Wakalah is or shall become unlawful, unenforceable, voidable or void; (e) it is aware that the Sukuk Wakalah can only be offered, sold, transferred or otherwise disposed of directly or indirectly in accordance with the relevant selling restrictions and all applicable laws; (f) it has sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of subscribing or purchasing the Sukuk Wakalah, and is able and is prepared to bear the economic and financial risks of investing in or holding the Sukuk Wakalah; (g) it is subscribing or accepting the Sukuk Wakalah for its own account; and (h) it is a person to whom an issue, offer or invitation to subscribe or purchase the Sukuk Wakalah would constitute a person falling within any one or more of the categories of persons specified in Part 1 of Schedule 6 (or Section 229(1)(b)) and Part 1 of Schedule 7 (or Section 230(1)(b)), read together with Schedule 9 (or Section 257(3)) of the CMSA as amended from time to time if they consider purchasing the Sukuk Wakalah at issuance and Part 1 of Schedule 6 (or Section 229(1)(b)), read together with Schedule 9 (or Section 257(3)) of the CMSA if they consider purchasing the Sukuk Wakalah after issuance. Further, as the IMTNs have been accorded a rating of AAA by RAM, the issuance of, offer for subscription or purchase of, or invitation to subscribe for the IMTNs falls within Paragraph 12, Schedule 8 (or Section 257(1)) of the CMSA. Each recipient is solely responsible for seeking all appropriate expert advice as to the laws of all jurisdictions to which it is subject. For the avoidance of doubt, the Information Memorandum shall not constitute an offer or invitation to subscribe or purchase the Sukuk Wakalah in relation to any recipient who does not fall within item (h) above. Neither this Information Memorandum nor any other information supplied in connection with the Sukuk Wakalah is intended to provide the basis of any credit or other evaluation or should be considered as a recommendation by the Issuer and/or the Lead Arranger that any recipient of this Information Memorandum should purchase any of the Sukuk Wakalah. This Information Memorandum is not a substitute for, and should not be regarded as, an independent evaluation and analysis and does not purport to be all-inclusive. Each recipient contemplating purchasing the Sukuk Wakalah should perform and is deemed to have made its own independent investigation and analysis of the financial condition, status and affairs, and its own appraisal of the creditworthiness and nature, of the Issuer and of its subsidiaries and associated companies, the terms of the offering of the Sukuk Wakalah, including the merits and risks involved, and all other relevant matters, and each recipient should consult its own professional advisers. All information and statements herein are subject to the detailed provisions of the respective agreements referred to herein and are qualified in their entirety by reference to such documents. Neither the delivery of this Information Memorandum nor the offering, sale or delivery of any Sukuk Wakalah shall in any circumstance imply that the information contained herein concerning the Issuer is correct at any time subsequent to the date hereof or that any other information supplied in connection with the Sukuk Wakalah is correct as of any time subsequent to the date indicated in the document containing the same. Neither the Lead Arranger nor any other advisers for the issue of Sukuk Wakalah iii
5. Maybank Islamic Berhad Information Memorandum RM10 ,000,000,000 ICP/IMTN Programme undertake to review the financial condition or affairs of Issuer or to advise any investor in any Sukuk Wakalah of any information coming to their respective attention. This Information Memorandum includes certain historical information, estimates, or reports thereon derived from sources mentioned in this Information Memorandum and other parties with respect to the material businesses in which Issuer operates and certain other matters. Such information, estimates, or reports have been included solely for illustrative purposes only. No representation or warranty is made as to the accuracy or completeness of any information, estimate and report thereon derived from such and other third party sources. FOR INFORMATION CONCERNING CERTAIN RISK FACTORS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS, SEE “INVESTMENT CONSIDERATIONS” IN SECTION 4.0 HEREOF. Certain statements in this Information Memorandum are based on historical data, which may not be reflective of the future, and others are forward-looking in nature and are subject to risks and uncertainties. While the Issuer believes that these forward-looking statements are reasonable, these statements are nevertheless subject to known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to differ materially from the future results, performance or achievements expressed or implied in such forward-looking statements. The Issuer is not under any obligation to update or revise such forward-looking statements to reflect any change in expectations or circumstances. In light of all this, the inclusion of forward-looking statements in this Information Memorandum should not be regarded as a representation or warranty by the Issuer that the plans and objectives of the Issuer will be achieved. STATEMENT OF DISCLAIMER ON THE SHARIAH PRONOUNCEMENT Maybank Islamic Berhad, as the Shariah Adviser, has approved the structure and mechanism of the Sukuk Wakalah and their compliance with Shariah. However, the approval is only an expression of the view of the Shariah Adviser based on its extensive experience in the subject. There can be no assurance as to the Shariah permissibility of the structure of the Sukuk Wakalah and the trading of the Sukuk Wakalah and neither the Issuer, the Lead Arranger nor any other person makes any representation of the same. Investors are reminded that, as with any Shariah views, differences in opinion are possible. Investors are advised to obtain their own independent Shariah advice as to whether the structure meets their individual standards of compliance and make their own determination as to the future tradability of the Sukuk Wakalah on any secondary market. ACKNOWLEDGEMENT The Issuer hereby acknowledges that it has authorised the Lead Arranger to circulate or distribute this Information Memorandum on its behalf in respect of or in connection with the proposed offer or invitation to subscribe for and issue of the Sukuk Wakalah to prospective investors to whom an issue, offer or invitation to subscribe or purchase the Sukuk Wakalah would constitute persons falling within any one or more of the categories specified in Part 1 of Schedule 6 (or Section 229(1)(b)) and Part 1 of Schedule 7 (or Section 230(1)(b)), read together with Schedule 9 (or Section 257(3)) of the CMSA at the point of issuance of the Sukuk Wakalah and thereafter in Part 1 of Schedule 6 (or Section 229(1)(b)), read together with Schedule 9 (or Section 257(3)) of the CMSA, and that no further evidence of authorisation is required. Further, as the IMTNs have been accorded a rating of AAA by RAM, the issuance of, offer for subscription or purchase of, or invitation to subscribe for the IMTNs falls within Paragraph 12, Schedule 8 (or Section 257(1)) of the CMSA. THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK iv
6. Maybank Islamic Berhad Information Memorandum RM10 ,000,000,000 ICP/IMTN Programme STATEMENTS OF DISCLAIMER – SECURITIES COMMISSION MALAYSIA In accordance with the CMSA, a copy of this Information Memorandum will be deposited with the Securities Commission Malaysia (“SC”), which takes no responsibility for its contents. The issue, offer or invitation in relation to the Sukuk Wakalah in this Information Memorandum or otherwise is subject to the fulfilment of various conditions precedent including without limitation the lodgement of the required information and relevant documents in relation to the ICP/IMTN Programme with the SC. All required information and relevant documents relating to the ICP/IMTN Programme have been lodged with the SC on 30 November 2016 pursuant to the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework revised and effective on 15 June 2015, as amended from time to time (“LOLA Guidelines”). Under the CMSA, the establishment of the ICP/IMTN Programme will not require the SC’s approval, authorisation or recognition under Section 212 of the CMSA, provided that the making available of, offering for subscription or purchase of, or issuance of an invitation to subscribe for or purchase the Sukuk Wakalah complies with the LOLA Guidelines as may be specified by the SC. Please note that the lodgement with the SC shall not be taken to indicate that the SC recommends the subscription or purchase of the Sukuk Wakalah under the ICP/IMTN Programme. The SC shall not be liable for any non-disclosure on the part of the Issuer and assumes no responsibility for the correctness of any statements made or opinions or reports expressed in this Information Memorandum. EACH SERIES OF THE SUKUK WAKALAH CARRY DIFFERENT RISKS. INVESTORS SHOULD RELY ON THEIR OWN EVALUATION TO ASSESS THE MERITS AND RISKS OF THE INVESTMENT. IT IS RECOMMENDED THAT PROSPECTIVE INVESTORS CONSULT THEIR FINANCIAL, LEGAL AND OTHER ADVISERS BEFORE PURCHASING OR ACQUIRING OR SUBSCRIBING THE SUKUK WAKALAH. CONFIDENTIALITY To the recipient of this Information Memorandum: This Information Memorandum and its contents are strictly confidential and are provided strictly on the basis that the recipient shall ensure the same remains confidential. Accordingly, this Information Memorandum and its contents, and/or any information which is made available to the recipient in connection with any further enquiries, must be held in complete confidence. This Information Memorandum is submitted to selected persons specifically in reference to the Sukuk Wakalah, falling within one of the categories of persons specified in Part 1 of Schedule 6 (or Section 229(1)(b)); and Part 1 of Schedule 7 (or Section 230(1)(b)); read together with Schedule 9 (or Section 257(3)) of the CMSA at the point of issuance of the Sukuk Wakalah and Part 1 of Schedule 6 (or Section 229(1)(b)), read together with Schedule 9 (or Section 257(3)) of the CMSA after the issuance of the Sukuk Wakalah. Further, as the IMTNs have been accorded a rating of AAA by RAM, the issuance of, offer for subscription or purchase of, or invitation to subscribe for the IMTNs falls within Paragraph 12, Schedule 8 (or Section 257(1)) of the CMSA. This Information Memorandum may not be reproduced or used, in whole or in part, for any purpose, nor furnished to any person other than those to whom copies have been sent by the Lead Arranger. Any forwarding, distribution or reproduction of this document in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of applicable laws. If you have received this Information Memorandum contrary to any of the foregoing restrictions, you are not authorised and will not be able to purchase any of the securities described herein. v
7. Maybank Islamic Berhad Information Memorandum RM10 ,000,000,000 ICP/IMTN Programme In the event that there is any contravention of this confidentiality undertaking or there is reasonable likelihood that this confidentiality undertaking may be contravened, each of the Issuer and the Lead Arranger may, at its discretion, apply for any remedy available to the Issuer and the Lead Arranger whether at law or equity, including without limitation, injunctions. Each of the Issuer and the Lead Arranger is entitled to fully recover from the contravening party all costs, expenses and losses incurred and/or suffered, in this regard on a full indemnity basis. For the avoidance of doubt, it is hereby deemed that this confidentiality undertaking shall be imposed upon the recipient, the recipient’s professional advisers, directors, employees and any other persons who may receive this Information Memorandum (or any part of it) from the recipient. The recipient must return this Information Memorandum and all copies whether in whole or in part and any other information in connection therewith to the Lead Arranger promptly upon the Lead Arranger’s or the Issuer’s request. FORWARD-LOOKING STATEMENTS The Issuer has included statements in this Information Memorandum which contain words or phrases such as “will”, “would”, “aimed”, “is likely”, “believes”, “expected to”, “will continue”, “anticipate”, “estimates”, “plans”, “seeks to”, “proposes to”, “future”, “objective”, “goals”, “projected”, “should”, “can”, “could”, “may” and similar expressions or variations of such expressions, that are “forward-looking statements”. Actual results may differ materially from those suggested by the forward-looking statements due to certain risks or uncertainties associated with the expectations of the Issuer with respect to, but not limited to, their ability to successfully implement their strategy, future levels of non-performing assets and restructured assets, their growth and expansion, the adequacy of their allowance for credit and investment losses, technological changes, investment income, their ability to market new products, cash flow projections, the outcome of any legal or regulatory proceedings they are or becomes a party to, the future impact of new accounting standards, their ability to implements their dividend policy, their ability to roll over their short-term funding sources, their exposure to market risks and the market acceptance of and demand for property. In addition, other factors that could cause actual results to differ materially from those estimated by the forward-looking statements contained in this Information Memorandum include, but are not limited to, general economic and political conditions in Malaysia and the other countries which have an impact on the Issuer’s business activities or investments, political or financial instability in Malaysia or elsewhere or any other acts of terrorism worldwide, any anti-terrorist or other attacks by any country, inflation, deflation, unanticipated turbulence in interest rates, changes in foreign exchange rate, equity prices or other rates or prices, the performance of the financial markets in Malaysia and globally, changes in domestic and foreign laws, regulations and taxes, changes in competition and pricing environment in Malaysia and regional or general changes in asset valuations. For a further discussion on the factors that could cause actual results to differ, see the discussion under “Investment Considerations” contained in this Information Memorandum. THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK vi
8. Maybank Islamic Berhad Information Memorandum RM10 ,000,000,000 ICP/IMTN Programme TABLE OF CONTENT Headings Pages GLOSSARY OF DEFINITIONS AND ABBREVIATIONS ................................................. ix 1.0 EXECUTIVE SUMMARY ........................................................................... 1 1.1 Introduction ....................................................................................... 1 1.2 The ICP/IMTN Programme ....................................................................... 1 1.3 The Shariah Structure of the ICP/IMTN Programme ........................................ 3 1.4 Utilisation of Proceeds........................................................................... 8 1.5 Rating ............................................................................................... 8 2.0 PRINCIPAL TERMS AND CONDITIONS ......................................................... 9 3.0 SELLING RESTRICTIONS ........................................................................33 4.0 INVESTMENT CONSIDERATIONS ..............................................................34 4.1 Considerations Relating to the Business ..................................................... 34 4.2 Considerations relating to the Malaysian economy ........................................ 41 4.3 Considerations relating to the Malaysian Banking Industry .............................. 44 4.4 Considerations Relating to the Sukuk Wakalah ............................................. 46 4.5 General Considerations ......................................................................... 50 5.0 SELECTED FINANCIAL INFORMATION .......................................................52 6.0 DESCRIPTION OF MAYBANK ISLAMIC ........................................................54 6.1 Introduction ...................................................................................... 54 6.2 Principal Shareholder ........................................................................... 55 6.3 Maybank Islamic Lines of Business ............................................................ 56 6.4 Shariah Governance and Compliance ........................................................ 57 6.5 Employees......................................................................................... 58 7.0 FUNDING AND CAPITAL ADEQUACY .........................................................59 7.1 Funding ............................................................................................ 59 7.2 Capital Adequacy ................................................................................ 60 8.0 ASSET QUALITY .................................................................................62 8.1 Financing Portfolio .............................................................................. 62 8.2 Financing and Advances by Type ............................................................. 62 8.3 Financing and Advances by Economic Purpose ............................................. 63 8.4 Classification and Impairment Provisions for Financing .................................. 63 8.5 Write-Off Policies ................................................................................ 64 8.6 Profile of Impaired Financing.................................................................. 64 8.7 Securities Portfolio .............................................................................. 65 vii
9. Maybank Islamic Berhad Information Memorandum RM10 ,000,000,000 ICP/IMTN Programme 9.0 RISK MANAGEMENT .............................................................................66 9.1 Risk Governance Structure ..................................................................... 66 9.2 Holistic Enterprise Risk Management Approach ............................................ 68 9.3 The Group’s Seven Broad Principles of Risk Management ............................... 68 9.4 Risk Appetite ..................................................................................... 69 9.5 Capital Management ............................................................................ 69 9.6 Internal Capital Adequacy Assessment Process (“ICAAP”) ............................... 70 10.0 MALAYSIAN BANKING INDUSTRY OVERVIEW ...............................................71 10.1 Ministry of Finance Malaysia – Quarterly Update on the Malaysian Economy – 3rd Quarter of 2016 .................................................................................. 71 10.2 Ministry of Finance Malaysia - Economic Report 2016/2017 ............................. 74 10.3 BNM – Economic and Financial Developments in Malaysia in the Third Quarter of 2016 ................................................................................................ 76 11.0 BOARD OF DIRECTORS AND MANAGEMENT ................................................79 11.1 Profile of the Board of Directors .............................................................. 79 11.2 Profile of Shariah Committee ................................................................. 82 11.3 Senior Management ............................................................................. 86 12.0 CONFLICT OF INTEREST AND APPROPRIATE MITIGATING MEASURES ................87 13.0 OTHER INFORMATION ..........................................................................89 13.1 Material Contracts ............................................................................... 89 13.2 Material Litigation ............................................................................... 89 APPENDIX I .................................................................................................90 Audited Financial Statements for the Financial Year Ended 31 December 2015 ............... 90 APPENDIX II ................................................................................................91 Unaudited Financial Statements for the Financial Third Quarter Ended 30 September 201691 viii
10. Maybank Islamic Berhad Information Memorandum RM10 ,000,000,000 ICP/IMTN Programme GLOSSARY OF DEFINITIONS AND ABBREVIATIONS Except where the context otherwise requires, the following abbreviations shall apply throughout this Information Memorandum: “BNM” Bank Negara Malaysia “Board” Board of Directors of Maybank Islamic “Bookrunner” Maybank IB “Call Option” The relevant call option in relation to each Series of IMTNs “Cagamas” Cagamas Berhad (Company No. 157931-A) “CFS” Community Financial Services “CMSA” Capital Markets and Services Act, 2007 of Malaysia (as amended from time to time) “CPI” Consumer Price Index “GB” Global Banking “Government” Government of Malaysia “ICPs” Islamic commercial papers to be issued pursuant to the ICP/IMTN Programme “ICP/IMTN Programme” Islamic commercial paper/Islamic medium term note programme of up to RM10.0 billion in nominal value based on the Shariah principle of Wakalah Bi Al-Istithmar “IFSA” The Islamic Financial Services Act, 2013 of Malaysia (as amended from time to time) “IMTNs” Islamic medium term notes to be issued pursuant to the ICP/IMTN Programme “Information Memorandum” This Information Memorandum dated 2 December 2016 in relation to the ICP/IMTN Programme ix
11. Maybank Islamic Berhad Information Memorandum RM10 ,000,000,000 ICP/IMTN Programme “Lead Arranger” Maybank IB “Lead Manager” Maybank IB “LOLA Guidelines” Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework issued by the SC as revised and effective on 15 June 2015 (as amended from time to time) “Maybank” Malayan Banking Berhad (Company No. 3813-K) “Maybank Board” Board of Directors of Maybank “Maybank Group” or the “Group” Maybank and its subsidiaries “Maybank IB” Maybank Investment Bank Berhad (Company No. 15938-H) “Maybank Islamic” or the “Bank” or the “ Issuer” Maybank Islamic Berhad (Company No. 787435-M) “OPR” Overnight Policy Rate “Principal Adviser” Maybank IB “RAM” RAM Rating Services Berhad (Company No. 763588-T) “RM” “Ringgit Malaysia”, which is the lawful currency of Malaysia “RMC” Risk Management Committee of Maybank “SAC” The Shariah Advisory Council of the SC “SC” Securities Commission Malaysia “Series” In relation to any Sukuk Wakalah, such Sukuk Wakalah with the same: (i) maturity date; and (ii) periodic distribution rate and periodic distribution dates (in the case of IMTNs issued with periodic distribution) or yield (in the case of IMTNs issued without periodic distribution or in the case of ICPs). For the avoidance of doubt, each Series of Sukuk Wakalah shall have the same terms and conditions (except for the issue date and the x
12. Maybank Islamic Berhad Information Memorandum RM10 ,000,000,000 ICP/IMTN Programme issue price, if applicable). “Shariah Adviser” Maybank Islamic Berhad “subsidiaries” Has the meaning ascribed to it in the Companies Act, 1965 of Malaysia (as amended from time to time) “Sukukholders” The bearer for the time being of the Sukuk Wakalah or the person for the time being entitled to the Sukuk Wakalah “Sukuk Trustee” Pacific Trustees Berhad (Company No. 317001-A) “Sukuk Wakalah” ICPs and/or IMTNs to be issued pursuant to the ICP/IMTN Programme “Trust Deed” A trust deed between the Issuer and the Sukuk Trustee in relation to the Sukuk Wakalah “USD” “United States Dollar”, which is the lawful currency of the United States of America THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK xi
13. Maybank Islamic Berhad Information Memorandum RM10 ,000,000,000 ICP/IMTN Programme 1.0 EXECUTIVE SUMMARY The summary below aims to provide an overview of the information contained in the Information Memorandum. As such, it does not contain all the information that may be important to you and should therefore be read with this entire Information Memorandum. 1.1 Introduction The Issuer was incorporated under the Companies Act, 1965 on 5 September 2007 under the name Maybank Islamic Berhad with its registered office at 14th Floor, Menara Maybank, 100, Jalan Tun Perak, 50050 Kuala Lumpur. The Issuer’s principal place of business is at Level 10, Tower A, Dataran Maybank, No. 1 Jalan Maarof, 59000 Kuala Lumpur. The Issuer is a wholly owned subsidiary of Maybank and the Issuer is the Islamic financing arm of Maybank under the universal-banking model. The Issuer started operations on 1 January 2008, after the transfer of its parent’s Islamic financing operations to the Issuer. The Issuer is principally engaged in the business of Islamic financing and provision of related financial services. Currently, the Issuer has 9 stand-alone branches in Malaysia while at the same time leverages on the Group’s infrastructure and network to offer end-to-end Shariah-compliant financial solutions. Its portfolio of diversified products and services is available through its parent’s extensive retail network of over 370 domestic branches as well as in Indonesia, Singapore, Hong Kong, London and Bahrain. 1.2 The ICP/IMTN Programme Brief Structure of the ICP/IMTN Programme The Issuer proposes to establish the ICP/IMTN Programme which shall provide flexibility for the Issuer to issue, from time to time, Sukuk Wakalah during the tenure of the ICP/IMTN Programme, provided that the aggregate outstanding amount of the Sukuk Wakalah shall not at any time exceed RM10.0 billion in nominal value. Pursuant to the Trust Deed, subject to the prior endorsement of the SAC and the Shariah Adviser and the confirmation from RAM that the rating of the ICP/IMTN Programme will not be affected, no further consent is required to be obtained from the Sukukholders, the Sukuk Trustee or any other party under the ICP/IMTN Programme (i) for the Issuer to issue ICPs and/or IMTNs based on Shariah principle other than Wakalah Bi Al-Istithmar, (ii) to amend the structure of the Sukuk Wakalah so as to comply with any future requirements of the Wakalah Bi Al-Istithmar principle, or (iii) to amend the structure of any Shariah principles (other than Wakalah Bi Al-Istithmar) which may be adopted by the Issuer so as to comply with any future requirements of such Shariah principles. For the avoidance of doubt, any changes to the Shariah principle(s) and/or the structure of the Shariah principle(s) of any Sukuk Wakalah which are outstanding, shall require the prior approval of the Sukukholders of such outstanding Sukuk Wakalah and confirmation from RAM that the rating of the ICP/IMTN Programme will not be affected. The Issuer shall have the option to upsize the ICP/IMTN Programme limit provided that (a) such upsizing will not result in any adverse impact on the rating of the ICP/IMTN Programme, (b) the relevant requirements under the LOLA Guidelines in relation to such upsizing has been complied with, and (c) the relevant regulatory approvals have been obtained (if applicable). Pursuant to the Trust Deed, no further consent is required to be obtained from the Sukuk Trustee, the Sukukholders or any other party under the ICP/IMTN Programme for the Issuer to exercise the option to upsize the ICP/IMTN Programme limit. 1
14. Maybank Islamic Berhad Information Memorandum RM10 ,000,000,000 ICP/IMTN Programme The tenure of the ICP/IMTN Programme shall be seven (7) years from the date of first issuance of the Sukuk Wakalah. Each Series of ICPs issued under the ICP/IMTN Programme shall have a fixed tenure of at least one (1) month and not more than twelve (12) months and each Series of IMTNs issued under the ICP/IMTN Programme shall have a fixed tenure of at least one (1) year and up to seven (7) years, as may be determined by the Issuer, provided that no ICPs or IMTNs shall mature after the expiry of the ICP/IMTN Programme. The issuance of each Series of IMTNs under the ICP/IMTN Programme may have a call option (“Call Option”), to be determined by the Issuer prior to each issuance of IMTN. In relation to each Series of IMTNs for which there is a Call Option, the Issuer may redeem such Series of IMTNs in whole or in part on a pro-rata basis on the relevant call date(s) at the redemption amount. The terms of the Call Option (including the relevant call date(s) and the redemption amount) shall be determined prior to each issuance of the IMTNs and shall be set out in the pricing supplement for the IMTNs issuance, if applicable, or any other relevant issuance documents disclosing the terms and conditions of the relevant Series of the IMTNs to be issued. The redemption of one Series of the IMTNs pursuant to the Call Option shall not trigger the early redemption of other Series of the IMTNs or dissolution event under the terms and conditions of the ICP/IMTN Programme. In the case of a partial redemption by the Issuer of a Series of IMTNs pursuant to the relevant Call Option, the selection of the IMTNs to be redeemed will be made by the Sukuk Trustee on a pro-rata basis, by lot or by such other method as the Sukuk Trustee (with the agreement of the Issuer) deem to be fair and appropriate. The Call Option is not applicable to the ICPs. Unless previously redeemed or purchased and cancelled, the Sukuk Wakalah will be redeemed by the Issuer at one hundred per cent (100%) of their nominal value on their respective maturity dates. The Issuer may, from time to time, without the consent of the Sukukholders, increase the size of an existing Series of the IMTNs by offering for subscription, additional IMTNs (“Reopened IMTNs”) under that Series (hereinafter referred to as “Reopening”). The Reopened IMTNs shall have the same terms and conditions as the existing Series of IMTNs in all respects (except for the issue date and the issue price, if applicable) and shall form a single series with the existing Series of IMTNs. All references to “IMTNs” referred in this Information Memorandum shall, upon a Reopening, be deemed to include the Reopened IMTNs wherever the same appears. Issue Price The IMTNs shall be issued at par, at a premium or at a discount to nominal value, whereas the ICPs shall be issued at a discount to nominal value. The issue price of the Sukuk Wakalah shall be determined prior to the issuance of each Series of the Sukuk Wakalah. The issue price of each Reopened IMTNs shall take into consideration, where applicable, accrued interest from and including the original issue date or the periodic distribution date, whichever is later, of that Series of IMTNs, to and excluding the date of the Reopening, except when the date of the Reopening falls on a periodic distribution date. The issue price of the Sukuk Wakalah shall be determined prior to each issuance of the Sukuk Wakalah, which shall be calculated in accordance with MyClear Rules and Procedures (as defined in Section 2.0 (Principal Terms and Conditions) below). 2
15. Maybank Islamic Berhad Information Memorandum RM10 ,000,000,000 ICP/IMTN Programme Periodic Distribution The ICPs shall be issued at a discount without periodic distribution. The IMTNs may be issued with or without periodic distribution. In relation to each Series of IMTNs issued with periodic distribution, the periodic distribution rate (which may be either on a fixed or floating basis) will be agreed between the Issuer and the Lead Manager prior to the issuance of the respective IMTNs on the basis of actual number of days elapsed and 365 days (actual/365 days) and shall be payable on a quarterly or semi-annual basis or such other payment frequency to be agreed between the Issuer and the Lead Manager prior to the issuance of such Series of IMTNs. In relation to IMTNs where the periodic distribution rate is on a floating basis, such periodic distribution rate shall be the aggregate of the Spread for Floating Rate (as defined below) and the Relevant Floating Rate Benchmark (as defined below) (“Floating Profit Rate”), subject to the Maximum Profit Rate (as defined below). If the Floating Profit Rate is higher than the Maximum Profit Rate, the Issuer shall be obliged to make Periodic Distribution at the Maximum Profit Rate only. “Maximum Profit Rate” is a rate to be agreed between the Issuer and the Lead Manager for the purposes of calculating the aggregate periodic distribution in determining the Deferred Sale Price (as defined in Section 1.3 (The Shariah Structure of the ICP/IMTN Programme) below) for a Series of IMTNs issued with periodic distribution where the periodic distribution rate is on a floating basis. “Relevant Floating Rate Benchmark” means Kuala Lumpur Interbank Offered Rate for sixmonth (or such other relevant period) Ringgit deposits or such other appropriate inter-bank rate for six-month (or such other relevant period) Ringgit deposits. “Spread for Floating Rate” means the spread to be determined at the point of issuance of the relevant Series of the IMTNs, where applicable, and expressed as a rate in per cent. per annum, to be agreed between the Issuer, the Lead Manager and the relevant investors and to be reflected in the pricing supplement or any other relevant documents. Status of the Sukuk Wakalah The Sukuk Wakalah issued pursuant to the relevant Transaction Documents will constitute direct, unconditional, unsecured and unsubordinated obligations of the Issuer ranking pari passu without any preference among themselves and pari passu with all other present and future unsecured and unsubordinated obligations of the Issuer, except those preferred by law and the Transaction Documents. 1.3 The Shariah Structure of the ICP/IMTN Programme The Issuer may from time to time issue the Sukuk Wakalah under the Shariah principle of Wakalah Bi Al-Istithmar where the aggregate outstanding nominal value of such Sukuk Wakalah shall not exceed RM10.0 billion at any one time. The Shariah principle of Wakalah Bi Al-Istithmar is one of the Shariah principles and concepts approved by the SAC. 3
16. Maybank Islamic Berhad Information Memorandum RM10 ,000,000,000 ICP/IMTN Programme Underlying transaction The ICP/IMTN Programme shall be effected as follows: 1) Pursuant to a wakalah agreement (“Wakalah Agreement”) entered into between the Sukuk Trustee (acting on behalf of the Sukukholders) and the Issuer, the Issuer shall be appointed by the Sukuk Trustee as agent of the Sukukholders (“Wakeel”) to perform duties in respect of the Shariah-compliant Wakalah portfolio (“Wakalah Portfolio”) for a nominal fee, including investment in and management of the Wakalah Portfolio, in accordance with the terms of the Wakalah Agreement. The Wakalah Portfolio shall comprise a combination of investments in the following: (a) Shariah-compliant general business of the Issuer (“Shariah-compliant Business”) or Shariah compliant assets owned by the Issuer; and (b) Shariah-compliant commodities (“Commodities”) to be sold to the Issuer as purchaser (“Purchaser”) under the Shariah principle of Murabahah (“Commodity Murabahah Investment”). The Wakalah Portfolio shall form part of the Trust Asset (as defined in Section 2.0 (Principal Terms and Conditions)). 2) The Wakeel shall declare a trust over the Wakalah Portfolio for the benefit of the Sukukholders. The Wakeel shall ensure that the Wakalah Portfolio shall at all times consist of Shariah-compliant Business or assets and Commodity Murabahah Investment throughout the tenure of the Sukuk Wakalah. The Issuer shall issue Sukuk Wakalah to the Sukukholders and the Sukukholders shall subscribe to the Sukuk Wakalah by paying the subscription proceeds. The Sukuk Wakalah shall represent the Sukukholders’ undivided and proportionate interest in the Trust Asset. 3) Pursuant to an investment agreement (“Investment Agreement”) entered into between the Wakeel and Maybank Islamic as the investment manager (“Investment Manager”), the Wakeel (on behalf the Sukukholders) shall utilise at least 33% of the proceeds of the Sukuk Wakalah (“Sukuk Proceeds”) as capital contribution into the Shariah-compliant Business or assets, subject to the valuation principles set out in the Wakalah Agreement. The Investment Manager shall manage the Shariah-compliant Business or assets for the benefit of the Sukukholders for a nominal fee. For the avoidance of doubt: (i) the above ratio may also be maintained throughout the tenure of the Sukuk Wakalah. However, the Wakeel shall ensure that the Shariah-compliant Business or assets shall at all times be a component of the Wakalah Portfolio; and (ii) the Sukukholders shall via the Trust Deed provide their upfront consent to the Issuer to create future trusts over the Shariah-compliant Business (“Future Trusts”) to facilitate any transactions undertaken in connection with any proposed Islamic financing facilities to be obtained by the Issuer, so long as the interest in the Future Trusts does not overlap with the interest of the Sukukholders in the Shariah-compliant Business or assets under the Wakalah Portfolio. 4
17. Maybank Islamic Berhad Information Memorandum RM10 ,000,000,000 ICP/IMTN Programme The Investment Manager shall be authorised by the Wakeel to substitute from time to time throughout the tenure of the Sukuk Wakalah at the option of the Investment Manager (including total loss of the Shariah-compliant assets), via an exchange agreement between the Investment Manager and the Issuer, the Shariah-compliant assets (if applicable) with qualified asset(s) of at least equal value owned by the Issuer that is/are Shariah-compliant and approved by the Shariah Adviser. The replacement assets shall form part of the Wakalah Portfolio. 4) The remaining proceeds of the Sukuk Wakalah shall be utilised by the Wakeel for investment in the Commodity Murabahah Investment. The Commodity Murabahah Investment shall be effected as follows: (a) Pursuant to a Murabahah investment agreement, Maybank Islamic as the Purchaser shall issue a purchase order to the Sukuk Trustee and the Wakeel with an undertaking to purchase the Commodities from the Wakeel at the Deferred Sale Price (as defined below). (b) The Wakeel shall purchase the Commodities on spot basis from a commodity supplier (via a commodity trading participant) (“Commodity Supplier”) at the commodity purchase price equivalent to such remaining Sukuk Proceeds (“Commodity Purchase Price”). (c) Upon acquiring the Commodities, the Wakeel shall sell the Commodities to the Purchaser for a sale price equivalent to the Commodity Purchase Price plus the Profit Margin (as defined below) payable on deferred basis (“Deferred Sale Price”), pursuant to the terms and conditions of a sale and purchase agreement. For the avoidance of doubt: (i) the Deferred Sale Price shall be an amount equal to the aggregate of the Expected Periodic Distribution Amount (as defined in Section 2.0 (Principal Terms and Conditions) below), if any, and the nominal value of the Sukuk Wakalah; and (ii) in the case of IMTNs issued with Periodic Distribution where the periodic distribution rate is on a floating basis, for the purpose of calculating the aggregate of the Expected Periodic Distribution Amount in determining the Deferred Sale Price, the profit rate shall be based on the Maximum Profit Rate. The Sukukholders shall agree to grant Ibra' of an amount equivalent to the difference, if any, between the Periodic Distribution calculated based on the Maximum Profit Rate and the Periodic Distribution calculated based on the Floating Profit Rate. The Ibra' shall be granted if the Floating Profit Rate is lower than the Maximum Profit Rate. If the Floating Profit Rate is higher than the Maximum Profit Rate, the Issuer shall be obliged to make Periodic Distribution at the Maximum Profit Rate only. “Profit Margin” for a particular issuance is an amount calculated based on any of the following, as applicable: (i) in the case of Sukuk Wakalah issued with Periodic Distribution and at par, the aggregate of the Periodic Distribution; 5
18. Maybank Islamic Berhad Information Memorandum RM10 ,000,000,000 ICP/IMTN Programme (ii) in the case of Sukuk Wakalah issued with Periodic Distribution and at discount, the aggregate of the Periodic Distribution and the discounted amount; (iii) in the case of Sukuk Wakalah issued with Periodic Distribution and at premium, the aggregate of the Periodic Distribution less the premium amount; and (iv) in the case of Sukuk Wakalah issued without Periodic Distribution and issued at discount, the discounted amount, provided that for any Series of Sukuk Wakalah issued with Periodic Distribution where the periodic distribution rate is a floating rate, the periodic distribution rate shall be based on the Maximum Profit Rate. (d) 5) The Purchaser may subsequently sell the Commodities to Bursa Malaysia Islamic Services or any other commodity buyer (other than the Commodity Supplier) on spot basis for an amount equal to the Commodity Purchase Price. The Wakeel shall distribute income generated from the Wakalah Portfolio (including returns from the Shariah-compliant Business or assets distributed by the Investment Manager and the Commodity Murabahah Investment) up to: (a) in the case of IMTNs issued with Periodic Distribution, the expected periodic distribution amount (“Expected Periodic Distribution Amount”) on each periodic distribution date (“Periodic Distribution Date”) to the Sukukholders in the form of periodic distribution (“Periodic Distribution”). The periodic distribution rate, which may be either on a fixed or floating basis, will be agreed between the Issuer and the LM prior to issuance of the respective IMTNs. In relation to IMTNs where the periodic distribution rate is on a floating basis, such periodic distribution rate shall be the Floating Profit Rate, subject to the Maximum Profit Rate; and (b) in the case of the ICPs and IMTNs issued without Periodic Distribution, the expected one-off distribution amount (“Expected One-off Distribution Amount”) to the Sukukholders in the form of a one-off distribution. Any excess above the Expected One-off Distribution Amount or Expected Periodic Distribution Amount (as the case may be) shall be waived by the Sukukholders and retained by the Wakeel as incentive fee. 6) Maybank Islamic (as “Obligor”) shall issue a purchase undertaking (“Purchase Undertaking”) in favour of the Sukuk Trustee (acting on behalf of the Sukukholders), under which the Obligor undertakes to purchase the Sukukholders’ interest in the Shariah-compliant Business or assets from the Sukuk Trustee (acting on behalf of the Sukukholders) (i) upon the declaration of a Dissolution Event (as defined in Section 2.0 (Principal Terms and Conditions) below) or (ii) on the maturity date of the Sukuk Wakalah, at a price equivalent to the market value of the Shariah-compliant Business or assets determined based on the valuation principles set out in the Wakalah Agreement (“Exercise Price”). 7) The Sukuk Trustee (acting on behalf of the Sukukholders) shall issue a sale undertaking under which the Sukuk Trustee shall sell the Shariah-compliant Business or assets to the 6
19. Maybank Islamic Berhad Information Memorandum RM10 ,000,000,000 ICP/IMTN Programme Issuer at the Exercise Price by entering into a sale agreement (“Sale Agreement”) upon early redemption pursuant to the Issuer’s exercise of the Call Option. 8) Upon redemption of the Sukuk Wakalah on the maturity date of the Sukuk Wakalah or on the date of declaration of a Dissolution Event (as the case may be), the Obligor shall purchase from the Sukuk Trustee (acting on behalf of the Sukukholders) the Sukukholders’ interest in the Shariah-compliant Business or assets at the relevant Exercise Price by entering into the Sale Agreement and the Purchaser shall pay the outstanding Deferred Sale Price (subject to any Ibra’). Upon the Issuer’s exercise of the Call Option, the Sukuk Trustee (acting on behalf of the Sukukholders) shall sell to the Issuer the Sukukholders’ interest in the Shariahcompliant Business or assets at the relevant Exercise Price by entering into the Sale Agreement and the Purchaser shall pay the outstanding Deferred Sale Price (subject to any Ibra’). Proceeds from the Wakalah Portfolio including the Exercise Price and the outstanding Deferred Sale Price shall be paid to the Sukukholders to redeem the outstanding Sukuk Wakalah. Any excess above the nominal value of the relevant Sukuk Wakalah and any accrued but unpaid periodic distribution (if applicable) shall be waived by the Sukukholders and retained by the Wakeel as an incentive fee upon full redemption of the relevant Sukuk Wakalah. Reopened IMTNs In relation to the Reopened IMTNs, the Issuer and the Sukuk Trustee shall execute new and separate contract(s) to reflect, amongst others, (i) the increased obligation pursuant to the increase in the outstanding nominal value of the relevant Reopened IMTNs, (ii) additional Shariah-compliant asset(s) required for the Reopened IMTNs and (iii) additional proceeds raised pursuant to the issuance of the Reopened IMTNs. The transaction diagram is as follows: 7
20. Maybank Islamic Berhad Information Memorandum RM10 ,000,000,000 ICP/IMTN Programme 1.4 Utilisation of Proceeds The proceeds from the Sukuk Wakalah will be utilised for Shariah compliant general business purposes and investment in Shariah compliant Commodities. The Issuer will utilise the proceeds for its general banking, working capital and other Shariah compliant corporate purposes, as well as to refinance any existing financing or debt instruments of the Issuer. 1.5 Rating The ICPs have been accorded a short-term rating of P1 and the IMTNs have been accorded a long-term rating of AAA by RAM, pursuant to their letter dated 10 November 2016. THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK 8