For the first time since its formation in January 1984, the Ministry of Finance of the Sultanate of Brunei made its debut in the international debt markets yesterday (Monday). ABN AMRO, BNP Paribas and HSBC, acting as mandated arrangers, launched a $250 million five-year loan into sub-underwriting.
The loan brings Brunei a step closer to its goal of establishing itself in the international financial community and developing its profile in the regional and international finance and capital markets. In May this year, the Ministry of Finance granted a licence for the establishment of the sultanate's first securities exchange, International Brunei Exchange (IBX), a company registered in Brunei, but wholly owned by Singapore based Nesdex.
The launch of the loan deal itself comes after almost a year since the banks were mandated for the deal in October 2001. The deal pays a spread of 105bp over Libor and is being marketed initially to an arranger group comprising of senior arrangers and arrangers. Senior arrangers are offered 10bp underwriting fees and 30bp participation fees for commitments of $40 million or above. Arrangers also receive the same participation fees, provided they join the transaction with commitments of $25 million or above on a take-and-hold basis. General syndication will be launched after September 20, the deadline for banks to join in the sub-underwriting stage.
The loan deal comes close on the heels of a visit by Sultan Haji Hassanal Bolkiah to Thailand last week where he signed three agreements to set up a joint investment fund, an e-commerce joint venture and a bilateral trading firm. Brunei is contributing up to two-thirds or $134 million of the $200 million fund that will make long-term investments in publicly listed and private Thai companies. The agreement includes an option to increase the size of the fund to $500 million.