The OPTIMAL Group of Companies Secure RM1,270 Million Islamic Debt Securities and USD468 Million Syndicated Loan Facilities


       

KUALA LUMPUR, September 21, 2004 - Aseambankers Malaysia Berhad (Aseambankers), HSBC Bank Malaysia Berhad (HSBC) and Malayan Banking Berhad (Maybank) are pleased to commemorate OPTIMAL Group of Companies' RM1,270 Million nominal value Al Bai Bithaman Ajil Islamic Debt Securities (BaIDS) and USD468 Million Syndicated Loan Facilities (Syndicated Loan Facilities) comprising of:

1. OPTIMAL OLEFINS (MALAYSIA) SDN BHD (OPTIMAL OLEFINS) RM250.0 Million BaIDS and USD200 Million Syndicated Loan Facility;
2. OPTIMAL GLYCOLS (MALAYSIA) SDN BHD (OPTIMAL GLYCOLS) RM453.0 Million BaIDS and USD118 Million Syndicated Loan Facility; and
3. OPTIMAL CHEMICALS (MALAYSIA) SDN BHD (OPTIMAL CHEMICALS) RM567.0 Million BaIDS and USD150 Million Syndicated Loan Facility.

This landmark transaction is the largest dual-currency denominated, project finance based, fund raising exercise for the year. It involves both a RM denominated tranche as well as a USD denominated tranche, with the total funding size amounting to approximately RM3 billion. Proceeds from the exercise will be utilized to refinance the OPTIMAL Group of Companies' existing shareholders' loans and outstanding bank loan facilities, which were utilized earlier to repay the shareholders' loans. The shareholders' loans were extended to OPTIMAL for the construction of a world class integrated petrochemical complex in Kertih, Terengganu.

The OPTIMAL Group of Companies was formed in 1998 to build and operate an integrated petrochemical complex in Kertih (the Project). Total cost for the construction of the Project amounted to approximately RM5.13 billion which was financed entirely by shareholders' funds (i.e. approximately 30% equity and 70% Shareholders' loans).

The plants are located within the PETRONAS Petroleum Industry Complex in Kertih, Terengganu, which is the largest, fully integrated, multi product, natural gas based complex in Asia.

The tenure for the BaIDS issued by OPTIMAL OLEFINS is five years whereas the tenure for the BaIDS issued by OPTIMAL GLYCOLS and OPTIMAL CHEMICALS is ten years. The USD Term Loan tenure for OPTIMAL OLEFINS is five years whilst, the tenure for OPTIMAL GLYCOLS and OPTIMAL CHEMICALS is eight years.

This will be the first foray for the OPTIMAL Group of Companies into Islamic capital markets, in line with the government's objective of developing the Malaysian capital market and further promoting the issuance of Islamic capital market instruments by Malaysian issuers. With the completion of the BaIDs transaction, the OPTIMAL Group has now diversified its source of financing, allowing it to tap the domestic capital market apart from gaining direct access to end investors.

The BaIDS is expected to be well received by investors given the AAA rating accorded to all three issuances by Malaysian Rating Corporation Berhad. It will be the largest issuance by a petrochemical player representing a significant milestone for the Malaysian financial community in line with its efforts of promoting the Islamic capital markets. The BaIDS will be a significant addition to the local Islamic capital market and is expected to further strengthen the domestic capital market as a whole, thus providing further liquidity as well as adding depth and breadth to the market. The BaIDS will be issued by way of a book building exercise to be managed by the Joint Lead Arrangers and Managers.

The USD468 Million Syndicated Loan Facilities have been successfully completed and oversubscribed by more than 30% by a group of 13 banks. The Hongkong and Shanghai Banking Corporation Limited (HSBC Limited), Maybank, The Bank of Tokyo-Mitsubishi, Limited, Bumiputra-Commerce Bank (L) Limited, Mizuho Corporate Bank, Ltd./Mizuho Corporate Asia (HK) Limited, RHB Bank (L) Ltd, Sumitomo Mitsui Banking Corp, and United Overseas Bank Limited joined as Mandated Lead Arrangers. The Bank of East Asia, Limited, DBS Bank Ltd, OCBC Bank (Malaysia) Berhad, and Standard Chartered Bank joined as Lead Arrangers whilst AmInternational (L) Ltd joined as a Manager. HSBC and Maybank acted as bookrunners in the Syndicated Loan Facilities.

In his speech Tan Sri Mohamed Basir Bin Ahmad, Chairman of Maybank and Aseambankers said "The Maybank Group is privileged to have jointly arranged this landmark deal for the OPTIMAL Group of Companies. Maybank is the largest financial institution in the country and together with Aseambankers, its investment arm, are significant players in the Malaysian capital market. This financing bears testimony to the expertise and growing presence of the Maybank Group including Aseambankers. This exercise is also in line with the recent 2005 budget that will see further liberalization of the domestic capital markets and the Ringgit bond market remaining vibrant with increased issuance expected from supranational agencies and multinational corporations. We are indeed proud to be part of this transaction and would like to congratulate the OPTIMAL Group of Companies on this successful fund raising exercise."

Deputy Chairman and Chief Executive Officer of HSBC Bank Malaysia Berhad, Mr Zarir J Cama said: "HSBC is proud to play an important role in the Optimal Group of Companies' financing as Joint Lead Arranger for the Ringgit Islamic bond issuance and as one of the Mandated Lead Arrangers for the USD syndicated loan. As a global bank which has always put our clients first, HSBC is pleased to have brought to bear our expertise and resources to ensure a successful outcome for OPTIMAL Group of Companies."

"This deal is one of the most significant debt finance transactions by a Malaysian corporate and we congratulate OPTIMAL and all parties involved for the successful execution of this landmark financing. This is another testimony to HSBC's expertise especially in Islamic debt financing, adding on to our achievements with the world's first sovereign Global Sukuk issue for Malaysia and the world's largest Global Sukuk for Qatar, and more recently Malaysia's first domestic Sukuk."

The signing ceremony was attended by the Joint Lead Managers/Mandated Lead Arrangers and participating banks. Signing on behalf of OPTIMAL Group of Companies was Mr James Ray Fitterling, its Chief Executive Officer, while mandated lead arrangers and participating banks were represented by their respective senior management. Mayban Trustee Berhad is the Trustee for the Islamic debt securities.

For further information, please contact the following:

Aseambankers Mr. John Chong, Head, Debt Capital Markets Tel : 603-20591881, Email: john@aseam.com.my

HSBC Mr. Eugene Szeto, Debt Syndicate Director Tel: 65-6239 7965 / 6536 4313 Email: eugeneszeto@hsbc.com.sg

About Aseambankers Malaysia Berhad

Acknowledged as one of Malaysia's premier investment bank, Aseambankers, a member of the Maybank Group, has received numerous recognition in the Malaysian debt capital market. It has to date been named Best at Islamic Bonds by Euromoney Islamic Finance Award 2003 and more recently awarded the Islamic Banking Awards 2004 for Best Islamic Wholesale Financial Services Provider by Euromoney.

This year, Aseambankers launched the first domestic charge card securitization transaction for Diners Club, achieving a milestone in the domestic Asset-Backed Securitization market. Other prominent debt market transactions successfully concluded are a wholesale securitisation for Aldwich Berhad, and Istisna' programme for SKS Power Sdn Bhd, a Medium Term Note programme for YTL Corporation Berhad and guaranteed bond issuance for Boustead Holdings Berhad.

About HSBC Bank Malaysia Berhad

HSBC Bank Malaysia Berhad has a strong presence in the Malaysian debt capital market and our dominant position is evidenced by our ranking as the number one Foreign Bank Debt Underwriter in Malaysia for the first half of 2004 and in 2003 by Bloomberg. We were also voted the Best Bank and Best Debt House in 2003 by the Asset Asia Awards.

We are an acknowledged provider of innovative debt finance solutions, having spearheaded the book-building syndication strategy in the Malaysian debt capital market.

HSBC is also a pioneer of Islamic debt securities, having sole lead managed the multi-award winning first Islamic Global Securities in the world for the Government of Malaysia. HSBC replicated this success again by sole lead managing Malaysia’s first globally Syariah-compliant domestic debt issue for Ingress Sukuk Berhad.

Other notable transactions successfully concluded by HSBC include Sime Darby’s RM500m Islamic MTN which was named the Bond Deal of the year in 2003 (IFR Review), YTL Corporation Berhad’s RM500m MTN, and Guthrie Property Holdings Berhad’s RM400m Islamic MTN.

HSBC Bank Malaysia Berhad is a wholly-owned subsidiary of HSBC Holdings plc. Headquartered in London, HSBC is one of the largest banking and financial service organisations in the world. As at 30 June 2004, HSBC had assets of USD1,154 billion. The HSBC Group has about 10,000 offices in 76 countries in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa.

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