Kuala Lumpur: Pembinaan BLT, a company owned by Malaysia's government, plans to sell 10 billion ringgit ($3.3 billion (Dh12.12 billion) of Islamic bonds to fund upgrades to national police facilities, a spokesman said.

The sukuk issuance will be the biggest in the Southeast Asian nation in more than three years, according to data compiled by Bloomberg.

The government raised $1.25 billion from its first Sharia-compliant dollar bond in eight years last May, drawing bids for five times the debt on offer.

The 3.928 per cent notes yielded 2.84 per cent in Kuala Lumpur yesterday, prices from the Royal Bank of Scotland Group show.

"There's likely to be a lot of interest from Gulf Cooperation Council countries," Mohammad Noor A Rahman, chief executive officer of OSK-UOB Islamic Fund Management, said in a telephone interview in Kuala Lumpur.

"I visited the Middle East in December and they have sovereign-wealth funds looking for sukuk investments."

Maturity in 25 years

The sukuk program will have a maturity of up to 25 years, with CIMB Investment Bank acting as principal adviser and lead arranger, according to an advertisement by Pembinaan in yesterday's Edge Financial Daily newspaper.

The joint lead managers are AmInvestment Bank, Bank Islam Malaysia, Maybank Investment Bank, and RHB Investment Bank.

Pembinaan was established by the government in 2005 following a royal commission which concluded housing and facilities for Malaysia's police were "unsatisfactory" and a "major" challenge.