Biggest Malaysia state fund said to renew exchangeable bond sale plan

[KUALA LUMPUR] Malaysia’s Permodalan Nasional Bhd (PNB) is considering reviving an exchangeable bond sale that it had explored six years ago to raise funds to expand overseas, people with knowledge of the matter said.

State-owned PNB is working with financial advisers on the potential offering of exchangeable bonds, which are notes backed by shares in a listed company, according to the people, who asked not to be identified because the process is private. It would be PNB’s first exchangeable bond sale, they said.

PNB is still deliberating and has not decided on the underlying stock or size and timing of a sale, the people said.

In response to a Bloomberg News query on the matter, PNB said it continuously evaluates options as part of an asset diversification strategy aimed at delivering sustainable returns.

PNB had RM347 billion (S$106 billion) assets under management as of Dec 24. Its investments include stakes in Malayan Banking, conglomerate Sime Darby and developer SP Setia. PNB also has holdings in Axiata Group, CIMB Group Holdings and Telekom Malaysia, among others.

PNB explored an exchangeable bond sale in 2019, Bloomberg reported, but a change in leadership and the Covid pandemic put the brakes on that plan. BLOOMBERG