Published on April 14th, 2022 | by Daniel Sherman Fernandez0
UOB And HSBC RM350 Million Notes For Mercedes-Benz Malaysia
The Malaysian investment community reacted strongly to Mercedes-Benz Notes.
This is Mercedes-Benz Services Malaysia’s largest issuance and highest oversubscription to date, with tight spread. UOB Malaysia and HSBC Malaysia successfully price four-year RM350 million Medium Term Notes for Mercedes-Benz Services Malaysia.
PRESS RELEASE: Kuala Lumpur, Malaysia, April 2022 – UOB Malaysia and HSBC Malaysia recently announced that they have successfully priced a four-year RM350 million Medium Term Notes (MTN) offering for Mercedes-Benz Services Malaysia Sdn Bhd (MBSM).
The MTN issuance, due in March 2026 at a fixed coupon rate of 3.62 per cent per annum, was rated AAA(s) by RAM Rating Services Berhad. Being MBSM’s sixth debt issuance in the Ringgit bond market, this transaction is the Company’s largest issuance and received the highest oversubscription rate to date.
The latest MTN issuance by MBSM was well received with a subscription rate of 4.76 times, subsequent to its upsized issue amount from the initial RM250 million. The landmark transaction drew strong demand from a diverse pool of high-quality investors, comprising insurance companies, fund managers, banks, private banks and quasi-government entities.
The offering achieved a tight spread, equivalent to 54 basis points above the four-year Malaysian Government Securities (MGS) rates and lower than the existing MBSM bond yields trading in the market.
MBSM is a subsidiary of Mercedes-Benz Mobility, a division of Mercedes-Benz Group AG, which also includes the vehicle manufacturer Mercedes-Benz AG, one of the world’s largest manufacturers of luxury passenger cars. MBSM finances, leases and insures Mercedes-Benz passenger cars and supports sales of the Mercedes-Benz Group’s automotive brands.
Ms Ng Wei Wei, Deputy Chief Executive Officer, UOB Malaysia, said, “We are honored to be entrusted with a repeat mandate from MBSM for its local currency bond issuance. This was indeed a landmark deal.
Despite the prevailing uncertain global market conditions, the MTN issuance managed to garner tight pricing and strong demand from institutional investors to become MBSM’s largest issuance to date.
This is a clear validation of investors’ confidence of MBSM’s strong credit and proactive liquidity management. Amid the current low interest rate environment, UOB Malaysia will continue to support our clients to tap the debt capital market to meet their liquidity needs and optimize their financing structure.”
Ms Christina Cheah, Country Head of Global Banking, HSBC Malaysia, said, “We are proud to once again support MBSM on another mandate for its four-year MTN which also marked its sixth local currency bond issuance. It is truly an outstanding accomplishment for MBSM particularly, as they have achieved the highest oversubscription rate to date from investors, resulting in a pricing lower than its current secondary yields trading in the market.
Moreover, the transaction was completed amid current elevated market volatilities and is testament to investors’ confidence on the Mercedes-Benz Group. The success of the transaction reinforces that domestic liquidity still remains for quality issuers.”
Mr Philipp Zuehlke, Chief Financial Officer, MBSM, said, “We are proud to have collaborated with both UOB Malaysia and HSBC Malaysia for this MTN issuance. Both banks have demonstrated their deep understanding of the automotive industry and our unique requirements as a leader in the global premium car sector. We look forward to advancing our business by leveraging on their strong domestic market expertise in Malaysia.”
MBSM’s sixth MTN transaction is a reinforcement of MBG’s confidence in and support of the domestic debt market. The transaction is part of MBSM’s RM3.0 billion debt offering programme which was launched in May 2018.