MANAGEMENT DISCUSSION AND ANALYSIS ISLAMIC FINANCING: SUKUK IJARAH The Group has fully redeemed its RM575 million Issue 2 Sukuk Ijarah under the RM1 billion IMTN Programme, on the expected maturity date of 4 May 2021. As such, the respective AAA/Stable and AA2/Stable ratings of the RM295 million Class A and RM60 million Class B Issue 2 Sukuk Ijarah has been withdrawn and no longer have any rating obligation with respect to the facility. The RM220 million Class C notes are unrated. Following the redemption of the Sukuk Ijarah, the facilities has been cancelled effectively on 10 December 2021. ISLAMIC FINANCING: COMMODITY MURABAHAH TERM FINANCING-I On 27 December 2019, Al-`Aqar obtained a floating rate financing facility (“Commodity Murabahah-I”) amounting to RM80.0 million to finance the acquisition of KPJ Batu Pahat Specialist Hospital with purchase consideration of RM78.0 million and to pay related cost and expenses during the acquisition. The Commodity Murabahah-I is payable over a period of 60 months from the date of first disbursement with bullet repayment of the principal sum on the 60th month. The Commodity Murabahah-I bears an effective profit rate of 1.25% per annum, above the bank’s Cost of Funds (“COF”). As at reporting date, the profit rate for the Commodity Murabahah-I is 3.35% (2020: 3.35%) per annum. ISLAMIC FINANCING: COMMODITY MURABAHAH TERM FINANCING-II On 30 November 2020, Al-`Aqar obtained floating rate financing facility (“Commodity MurabahahII”) amounting to RM29.9 million to refinance the Murabahah Tawarruq Term Financing-i. The Commodity Murabahah-II is payable over a period of 60 months from the date of first disbursement with bullet repayment of the principal sum on the 60th month. The Commodity Murabahah-II bears an effective profit rate of 1.25% per annum above the bank’s Cost of Funds (“COF”). As at reporting date, the profit rate for the Commodity Murabahah-II is 3.35% (2020: 3.35%) per annum. ISLAMIC FINANCING: COMMODITY MURABAHAH TERM FINANCING-III On 4 May 2021, The Group has restructured its existing Sukuk Ijarah of RM575.0 million into new Commodity Murabahah-III of RM580.0 million into 2 tranches. The first tranche of RM280.0 million will be due in May 2026 and second tranches of RM300.0 million will be due in May 2028. The profits are payable over a period of 60 months and 84 months, respectively from the date of the first disbursement with a bullet repayment of the principal sum on the 60th month and 84th month, respectively. The Commodity Murabahah-III bears an effective profit rate of 1.15% per annumand 1.25% per annum, above the bank’s Cost of Funds (“COF”) respectively. As at reporting date, the profit rate for the Commodity Murabahah-III is 3.32% and 3.44% (2020: Nil) per annum for Tranche 1 and Tranche 2 respectively. CORPORATE OVERVIEW STRATEGIC PERFORMANCE THE DRIVING FORCES SUSTAINABILITY STATEMENT 053 GOVERNANCE STRUCTURE FINANCIAL REPORTS
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