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

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1. MAYBANK ISLAMIC BERHAD 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 BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR Appendix I Transaction diagram of the Wakalah structure Transaction Flow 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 Shariahcompliant 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. “Trust Asset” shall comprise (i) Sukuk Proceeds, (ii) the Wakalah Portfolio and (iii) the rights, title, interest, entitlement and benefit in, to and under the Transaction Documents. 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 (“Sukuk Wakalah”) to the investors (“Sukukholders”) and the Sukukholders shall subscribe to the Sukuk Wakalah by paying the subscription proceeds. The 1
2. MAYBANK ISLAMIC BERHAD 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 BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR 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 MIB 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 Shariahcompliant 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. 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, MIB 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 herein). (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 proceeds of the Sukuk Wakalah (“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 herein) 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 herein), 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 2
3. MAYBANK ISLAMIC BERHAD 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 BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR the Maximum Profit Rate (as defined herein). 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 (as defined herein). 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; (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) 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. 5) 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 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 (as defined herein) 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. “Floating Profit Rate” means the periodic distribution rate which is the aggregate of the Spread for Floating Rate and the Relevant Floating Rate Benchmark. 3
4. MAYBANK ISLAMIC BERHAD 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 BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR “Maximum Profit Rate” is a rate to be agreed between the Issuer and the LM for the purposes of calculating the aggregate Periodic Distribution in determining the Deferred Sale Price for a Series of IMTNs issued with Periodic Distribution where the periodic rate is on a floating basis. “Relevant Floating Rate Benchmark” means Kuala Lumpur Interbank Offered Rate for six-month (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 LM and the relevant investors and to be reflected in the pricing supplement or any other relevant documents. 6) MIB (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 or (ii) on the maturity date of the Sukuk Wakalah, at a price equivalent to the market value of the Shariahcompliant Business or assets determined based on the valuation principles set out in the Wakalah Agreement. 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 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 (as defined herein). “Call Option” means, in relation to the issuance of each Series of IMTNs, the Issuer’s option to redeem (in whole or in part on a pro-rata basis) that Series of IMTNs prior to maturity on the relevant call date(s). “Series” means in relation to any IMTNs, such IMTNs 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). 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 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’). 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. 4
5. MAYBANK ISLAMIC BERHAD 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 BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR Reopened IMTNs In relation to the Reopened IMTNs (as defined herein), 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. 5