Reference Pricing Service Forum Presentation

REDUCING YOUR FUNDING COSTS :
A FORUM FOR EXISTING & POTENTIAL BOND

ISSUERS
Reference Pricing Service

19th June 2009
©Copyright BOND PRICING AGENCY MALAYSIA SDN.BHD (FORMERLY BONDWEB MALAYSIA SDN BHD). - All rights reserved.
CONTENTS
BACKGROUND
I. What is a Bond Pricing Agency

II. About Us – Bond Pricing Agency Malaysia Sdn Bhd
REFERENCE PRICING SERVICE (RPS)

I. What and Why
II. Market Study
III. Deliverables
IV. Fees and Charges
V. Subscription Procedure
POST ISSUANCE PRELIMINARY STUDY (PIPS)

BOND TRACKER
BACKGROUND
I. What is a Bond Pricing Agency

II. About Us – Bond Pricing Agency Malaysia Sdn Bhd
1.0 What Is A Bond Pricing Agency
A Bond Pricing Agency (BPA) is a market neutral entity whose role is to provide fair valuations on
bonds, complying with regulations issued by the Securities Commission
Why Fair Valuation?

Problem The Need Current method
Less than 1% are traded Daily valuation of bond Quotes from brokers or
daily, where are the prices for portfolios for NAV calculation banks, a few via internally
the remaining 99%? and portfolio valuation generated models – bias?
The Solution
The BPA provides evaluated pricing on all the bonds on any given day
The BPA employ reliable database and evaluation methodology.
This methodology MUST be transparent and consistent
Increase Managing and Compliance &

Increase Liquidity
Transparency Monitoring Risk Audit
1.1 What Is A Bond Pricing Agency
• BPA valuation approved by the SC may revitalize the bond market using mark-
Revitalizing the to-market prices as benchmark by publicly announcing them
Secondary Market for
Bonds • Marking-to-market system provide strategy alternatives to traditional hold-to-
maturity strategies.
• From an origination and underwriting perspective, primary level pricing

Revitalizing the becomes challenging especially for lower credits
Primary Market for • Mark-to-market pricing on previously issued corporate bonds can promote
Bonds new corporate bond issues by functioning as benchmarks for primary level
pricing
• BPA’s transparency in the methodologies being used will spur the evolution of
the bond market with further advance pricing methodologies
Promoting New
Product Development • When advance pricing methodologies are established, it will encourage more
bond offerings and more active trading of these products in the secondary
market.
• Providing price discovery may assist in financial institutions' compliance to

Improving the international standards such as IAS 39 and Basel 2 requirements.
Soundness of
Financial Institutions • Effectiveness of risk management will be further enhanced as the valuation
process will be consistent and not arbitrary
1.2 Introducing The Bond Pricing Agency Concept
Defining fair valuation :
• Fair valuation is the act of using recent arm’s length market transactions and relative
comparison with peers and benchmarks in deriving an instrument’s estimated current price.
Not the Definitive Market Price

• Mark-to-market using fair valuation approach does not set the definitive market price
An Accounting Device
• An accounting device to capture market value
• Act as a reference only
Is Not a Predictive Valuation Model
• Is not a pro-active model to pre-empt prices
• Is a passive reactive model to market conditions
Works under regulatory guidelines
• Evaluated and approved by regulators
• FRS 132 on valuation technique
1.3 Bond Pricing Regulations
Bond Pricing Agency Malaysia has met and exceeded these requirements, and was
appointed as the first registered Bond Pricing Agency on 18th April 2006
Pricing
Methodology and Expertise
performance
Process Fit and proper
3 month market
Audited persons
acceptance test
Shareholders Minimum paid up

System capital
No controlling Adequate security
party RM 10 million
and backup
Professional
indemnity
insurance
RM 10 million
2.0 Bond Pricing Agency Malaysia Sdn Bhd
Bond Pricing Agency Malaysia (BPAM) was incorporated in 2004.
Began groundwork in Malaysia
2001 - 2004 Discussions with SC and BNM With participation from:
Market study and research Rating Agencies on data and technical
Sept: Bondweb Malaysia Sdn Bhd support
established Regulators in observer and advisory role
2004
March: Website launched Market community (buy/sell side, brokers) via
July: BondStream pilot launched
Sept: Full marked-to-market “Bottom Up” approach
2005 process
Oct: Commercial deployment of
BondStream The Securities Commission issued Guidance
April 18: Appointed Malaysia’s first Note 15 dated 15 December 2006 pursuant to
2006 Bond Pricing Agency the Guidelines on Unit Trusts Funds, which
January 3: Guidance Note 15 on outlined the policy for Unit Trusts on use of
Mandatory use of BPA
prices by unit trust
BPA prices:
2007
companies
“Funds investing in Ringgit-denominated
Sept 15: Bondweb Malaysia is now
known as bonds shall value bond portfolios on daily
2008 Bond Pricing Agency basis using fair value prices quoted by a
Malaysia Sdn Bhd
Bond Pricing Agency (BPA) registered with
Status as of now the SC.”
> 90 clients (banks, AMC, UTMC, insurance companies,
corporate, quasi governments)
2.1 BPA Malaysia’s Clients
2.2 BPA Malaysia’s Clients (cont)
2.3 BPA Malaysia’s Product Lines
Optimised to the needs of market participants
1)Fair Valuation
- Daily MTM prices/yields
2)Bond Information
- Primary Market Data
- Secondary Market Data
3)Reference Pricing Service
4)Post Issuance Preliminary Study (PIPS)
5)Bond Tracker
6)Bond Index
7)Basel II Support Pack
8)RBC Support Pack
9)Customized Data Delivery
REFERENCE PRICING SERVICE (RPS)
I. What and Why

II. Market Study
III. Deliverables
IV. Fees and Charges
V. Subscription Procedures
VI. Additional Product Line for Issuer
1.0 What is Reference Pricing Service?
• A more efficient price discovery process for issuers in
The Need order to minimize their borrowing costs.
• Greater price transparency where issuers are fully aware of

Utopia market levels with full information
• Many issuers are dependent on their arranging banks for

rates, thus find it difficult to make an informed decision
Dystopia regarding financing costs.
• Issuers receive updates on market rates from arranging

banks. However, there is potentially a conflict of interest and
Current Method the banks may not have the economic incentive to quote fair
rates.
The RPS service from BPAM allows issuers to obtain an

independent, unbiased report on reference yield levels. This
data will provide them with the information required to make
evaluated, informed decisions regarding the pricing of their
bond issue.
1.1 Why Do You Need It ?
To indicate the fair price

for the proposed bond
issue based on the
current interest rate and
economic environment
REFERENCE
PRICING
SERVICE
Reduce Your
To provide you the Borrowing Costs
necessary information
when negotiating the final
rates with the buyers and
arrangers of the issue.
1.2 Methods of Issuance
Private Competitive
Bought Deal Book Building
Placement Tender
• Targeted • The entire • Source for • Is open to all

institutional issue is taken quotes in terms FAST
investors up by the Lead of pricing and members.
• Pricing is based Arranger amount from • All investors
on negotiation selected can submit their
potential bids via FAST
investors. members.
2.0 Market Study on Credit Classes – AAA to A
We conducted a market study over a few credit classes (AAA to A bonds). Our studies have shown that price
discrepancies between the cost of funding (assumed to be coupon level) to market levels in the secondary
market are very high
Coupon to BNM Curve Spreads for AAA-A On Day Of
Issuance Between June 2005- Mar 2009 Coupon To BNM Class Curves Observation
On Day Of Issuance
12%
1-20bp
Majority of new bonds issued had coupon
21-40bp levels above 100bp of the BNM Consolidated
11%
Class Curves on the day of issuance
46% 41-60bp
61-80bp This implies that the bonds were issued at

8%
heavy discount as the Class Curves represents
81-100bp the market average rate for the particular credit
11% Above 100bp
quality
12%
Number of Matched Highest Deviation Highest Deviation Highest Deviation from

Issuances to Curve from Curve (tenure) from Curve (bp) Curve (class)
826 3 Years 840bp AA3
2.1 Market Study on Credit Classes – AAA rated
A Study on AAA Credit Class within 1 Month from Issuance
– Coupon Level Vs Traded Level
Coupon Level to Traded Level Spread

for AAA Transactions Between 2003-2008
1-20bp Coupon To Traded Level Observation
15% 50% of the AAA rated new issuance

21-40bp had coupon level above 20 bps of the
Traded yield after issuance.
6%
40-60bp
5% 50%
60-80bp
5%
81-100bp
19%
Above
100bp
2.2 Market Study on Credit Classes – AAA rated(cont)
A Study on AAA Credit Class within 1 Month from Issuance
- Coupon Level Vs BNM Curve
Coupon Level to BNM Curve Spread
for AAA Transactions Between 2003-2008
Coupon To BNM Curves Observation
1-20bp
81% of the AAA rated new issuance
had coupon level above 20 bps of the
19% 21-40bp BNM consolidated Class Curve after
issuance
33%
40-60bp
15% 60-80bp
81-100bp
10% 6%
17% Above
100bp
2.3 Market Study on Credit Classes – AA rated
A Study on AA Credit Class within 1 Month from Issuance
Coupon to Traded Level Spread

for AA Transactions Between 2003-2008
Coupon To Traded Level Observation
1-20bp
64% of the AA rated new issuance
had coupon level above 20 bps of the
21-40bp
Traded yield after issuance.
34% 36%
40-60bp
60-80bp
81-100bp
4% 7% 14%
5% Above
100bp
2.4 Market Study on Credit Classes – AA rated (cont)
A Study on AA Credit Class within 1 Month from Issuance
– Coupon Level Vs BNM Curve
Coupon to BNM Curve Spread
for AA Transactions Between 2003-2008
1-20bp
85% of the AA rated new issuance had
15%
coupon level above 20 bps of the BNM
21-40bp consolidated Class Curve after issuance
39% 40-60bp
11%
60-80bp
11%
81-100bp
10% Above
14%
100bp
2.5 Market Study on Credit Classes – A rated
A Study on A Credit Class within 1 Month from Issuance
Coupon to Traded Level Spread
for A Transactions Between 2003-2008
Coupon To Traded Level Observation
1-20bp
14% 71% of the A rated new issuance had
coupon level above 20 bps of the
29% 21-40bp Traded yield after issuance.
10%
40-60bp
60-80bp
19% 10%
81-100bp
18% Above 100bp
2.6 Market Study on Credit Classes – A rated (cont)
A Study on A Credit Class within 1 Month from Issuance
– Coupon Level Vs BNM Curve
Coupon to BNM Curve Spread

for A Transactions Between 2003-2008
5% 1-20bp 50% of the A rated new issuance had
11% coupon level above 100 bps of the BNM
21-40bp consolidated Class Curve after issuance
8% 40-60bp
50%
60-80bp
12%
81-100bp
14% Above 100bp
2.7 One Month After Issuance - AAA Rated
We also studied the traded levels after the issue date in the Secondary Market.
We note that traded levels in the secondary market drop tremendously.
Coupon Level 5.40% .
Case Study 2002 - AAA Bond from a Road and Toll Within one month after issue, the
Concessionaire traded yield has descended quickly to 4.74%
5.6
Issue Amount = RM 550 million
5.4 Coupon Monetary Loss from coupon at last trade
Rate
5.2
= RM 3,657,500
Traded
% of Monetary Loss = 0.67%
5.0
Yield
Traded Yield Level

4.8
Case Study 2002- AAA Bond from a Road and Toll
4.6 BNM 5.6 Concessionaire
CURVE
4.4
5.4
Cost of
5.2 Cost of Capital Capital
04-Jun-02
06-Jun-02
08-Jun-02
10-Jun-02
12-Jun-02
14-Jun-02
16-Jun-02
18-Jun-02
20-Jun-02
22-Jun-02
24-Jun-02
26-Jun-02
28-Jun-02
5.0
4.8
Traded Yield Level
Actual
Monetary Loss from coupon at last trade =
4.6 Actual Market Cost Market
[Traded Yield% – Coupon Level%] x Issue Amt Cost
4.4
Monetary Loss from coupon at last curve =
[BNM indicative rate% - Coupon Level%] x Issue Amt
04-Jun-02
06-Jun-02
08-Jun-02
10-Jun-02
12-Jun-02
14-Jun-02
16-Jun-02
18-Jun-02
20-Jun-02
22-Jun-02
24-Jun-02
26-Jun-02
28-Jun-02
2.8 One Month After Issuance - AAA Rated (cont)
Case Study 2002 - AAA Bond from a Road and Toll
Concessionaire
5.6 Comparison Between Coupon Rate,
5.4
Coupon Traded Yield and BNM Indicative
Rate
5.2 Curve
5.0 Traded
Yield
4.8
Credit environment as reflected in the
Traded Yield Level

BNM Consolidated Indicative Yield was
4.6 BNM
CURVE stable throughout 1 month after the issue
4.4 date on Bond AAA
04-Jun-02
06-Jun-02
08-Jun-02
10-Jun-02
12-Jun-02
14-Jun-02
16-Jun-02
18-Jun-02
20-Jun-02
22-Jun-02
24-Jun-02
26-Jun-02
28-Jun-02
BNM last Curve at 4.63%
Coupon Rate at 5.40%
5.6 Case Study - AAA Bond from a Road and Toll
Concessionaire Last Trade Yield at 4.74%
5.4 Issue Amount = RM 550 million
Cost of
5.2 Capital
Monetary loss from coupon at last curve
5.0 Cost of Capital = RM 4,257,000
4.8 Credit % of Monetary Loss = 0.77%
Traded Yield Level

Cost
4.6
Credit Cost (BNM Curve) Monetary Loss from coupon at last trade
4.4
= RM 3,657,500
04-Jun-02
06-Jun-02
08-Jun-02
10-Jun-02
12-Jun-02
14-Jun-02
16-Jun-02
18-Jun-02
20-Jun-02
22-Jun-02
24-Jun-02
26-Jun-02
28-Jun-02
2.9 One Month After Issuance - AA Rated
Coupon Level 6.38%
6.5 Within one month after issue, the
6.3 Coupon traded yield has descended quickly to 5.20%
6.1 Rate Issue Amount = RM 700 million
5.9
5.7
Monetary Loss from coupon at last trade
5.5 Traded = RM 8,271,900
Yield
5.3 % of Monetary Loss = 1.18%
Traded Yield Level

5.1
4.9 BNM
4.7 CURVE
4.5 Case Study 2007 - AA Bond from a Utility
6.5 Corporate
6.3
Apr-07
May-07
May-07
May-07
May-07
May-07
May-07
May-07
May-07
May-07
May-07
May-07
May-07
May-07
May-07
May-07
6.1
Cost of
30-Apr
02-May
04-May
06-May
08-May
10-May
12-May
14-May
16-May
18-May
20-May
22-May
24-May
26-May
28-May
30-May
Capital
5.9 Cost of Capital
5.7
5.5
5.3
Monetary Loss from coupon at last trade = Actual
5.1
Traded Yield Level
Market
[Traded Yield% – Coupon Level%] x Issue Amt 4.9 Cost
Actual Market Cost
4.7
Monetary Loss from coupon at last curve = 4.5
30-Apr-07
02-May-07
04-May-07
06-May-07
08-May-07
10-May-07
12-May-07
14-May-07
16-May-07
18-May-07
20-May-07
22-May-07
24-May-07
26-May-07
28-May-07
30-May-07
2.10 One Month After Issuance - AA Rated (cont)
6.5
6.3 Comparison Between Coupon
6.1
Coupon
Rate Rate, Traded Yield and BNM
5.9
5.7 Indicative Curve
5.5 Traded
5.3 Yield
5.1
Traded Yield Level

4.9 Coupon Rate at 6.38%
BNM
4.7 Last Trade Yield at 5.20%
CURVE
4.5
Monetary loss from coupon at last
30-Apr-07
02-May-07
04-May-07
06-May-07
08-May-07
10-May-07
12-May-07
14-May-07
16-May-07
18-May-07
20-May-07
22-May-07
24-May-07
26-May-07
28-May-07
30-May-07
curve = RM 4,257,000
Case Study 2007 - AA Bond from a Utility Corporate
6.3
6.1 Cost of
5.9 Capital
Monetary Loss from coupon at last
5.7
Cost of Capital trade = RM 8,271,900
5.5
5.3
5.1 Credit
Traded Yield Level

4.9 Cost
4.7
Credit Cost (BNM Curve)
4.5
30-Apr-07
02-May-07
04-May-07
06-May-07
08-May-07
10-May-07
12-May-07
14-May-07
16-May-07
18-May-07
20-May-07
22-May-07
24-May-07
26-May-07
28-May-07
30-May-07
2.11 One Month After Issuance - A Rated
Case Study 2003 - A Bank Sub-debt
8.5
Coupon Level 7.95%
Within one month after issue, the
Coupon
8.0 Rate traded yield has descended quickly to 6.69%
7.5
Traded Monetary Loss from coupon to last trade
Yield = RM 2,516,800
7.0
Traded Yield Level

6.5 BNM
CURVE
6.0
8.5
Apr-03
May-03
May-03
May-03
May-03
May-03
May-03
May-03
May-03
May-03
May-03
May-03
May-03
May-03
May-03
May-03
8.0 Cost of
30-Apr
02-May
04-May
06-May
08-May
10-May
12-May
14-May
16-May
18-May
20-May
22-May
24-May
26-May
28-May
30-May
Capital
7.5 Cost of Capital
7.0
Traded Yield Level

Actual
Monetary Loss from coupon at last trade = 6.5 Market
[Traded Yield% – Coupon Level%] x Issue Amt Actual Market Cost Cost
6.0
Monetary Loss from coupon at last curve =
30-Apr-03
02-May-03
04-May-03
06-May-03
08-May-03
10-May-03
12-May-03
14-May-03
16-May-03
18-May-03
20-May-03
22-May-03
24-May-03
26-May-03
28-May-03
30-May-03
2.12 One Month After Issuance - A Rated (cont)
Comparison Between Coupon Rate,
8.5
Traded Yield and BNM Indicative
Coupon
8.0 Rate Curve
7.5
Traded However, traded yield levels were on a
7.0
Yield descending trend in the same timeframe
Traded Yield Level

eventhough the BNM curve was stable
6.5 BNM throughout 1 month after issuance date.
CURVE
6.0
This clearly is not reflective of market reality.
30-Apr-03
02-May-03
04-May-03
06-May-03
08-May-03
10-May-03
12-May-03
14-May-03
16-May-03
18-May-03
20-May-03
22-May-03
24-May-03
26-May-03
28-May-03
30-May-03
8.5 Case Study 2003 - A Bank Sub-debt Coupon Rate at 7.95%
8.0
Last Trade Yield at 6.69%
Cost of Issue Amount = RM 200 million
7.5
Capital
7.0 Cost of Capital Monetary loss from coupon at last curve =

RM 3,070,000
Traded Yield Level

Credit
Cost
Credit Cost (BNM Curve)
6.0
Monetary Loss from coupon at last trade
= RM 2,516,800
30-Apr-03
02-May-03
04-May-03
06-May-03
08-May-03
10-May-03
12-May-03
14-May-03
16-May-03
18-May-03
20-May-03
22-May-03
24-May-03
26-May-03
28-May-03
30-May-03
2.13 Case Study 1 – Past Issuance without RPS
Case Study - 3-year AAA Bond from Property Corporate
The graphs illustrate the Trade Trend for
the AAA bond 1 month after issuance,
4.0 Coupon where the traded level were compared to
Rate
3.9
Traded
i.) The bond’s coupon rate for cost of
3.8
Yield funding comparison and
3.7
Rate (%)
3.6 3 Yr BNM ii.) its earmarked equivalent 3 Yr and
AAA
3.5 Indicative 7Yr BNM AAA Indicative yield level.
Level
02
02
02
02
02
02
02
02
02
02
02
02
02
02
02
Assuming Funding Cost = Coupon
16-Aug-
18-Aug-
20-Aug-
22-Aug-
24-Aug-
26-Aug-
28-Aug-
30-Aug-
01-Sep-
03-Sep-
05-Sep-
07-Sep-
09-Sep-
11-Sep-
13-Sep-
Rate, the discrepancies in yield were
observed immediately after issuance.
7-year AAA Bond From Property Corporate
Coupon
5.4 The coupon level were set much higher
Rate
5.2
than the BNM indicative AAA curve.
5.0
4.8 Traded
Yield 3yr AAA :
4.6
Coupon Rate – Traded Yield = -35 bps
Rate (%)
4.4
4.2 7 Yr BNM
4.0 AAA 7yr AAA :
Indicative
Level Coupon Rate – Traded Yield = - 97 bps
03
03
03
03
03
02-
04-
06-
08-
May-03
May-03
May-03
May-03
22-Apr-
24-Apr-
26-Apr-
28-Apr-
30-Apr-
2.14 Case Study 1 – Post Issuance with RPS (cont)
4.5
Coupon
4.4 Rate
4.4
Using the information provided by the
4.3 RPS report , the issuer was able to
4.3 Traded close the pricing gap. The bond traded
4.2 Yield
4.2
very closely at its par level.
Rate (%)
4.1
4.1 5 Yr 5yr AAA :
4.0 BNM
AAA Coupon Rate – Traded Yield = +1 bps
09
09
09
09
09
09
09
09
09
09
09
09
09
09
09
09
Indicativ
22-Apr-
24-Apr-
26-Apr-
28-Apr-
30-Apr-
02-May-
04-May-
06-May-
08-May-
10-May-
12-May-
14-May-
16-May-
18-May-
20-May-
22-May-
e Level
10yr AAA :
Coupon Rate – Traded Yield = - 4 bps
5.2
Coupon
5.1 Rate RPS managed to narrow the
5.0 borrowing spread by matching the
4.9
Traded
Actual Market Cost (traded yield) and
4.8
Yield the Issuer Cost which is the coupon
4.7
Rate (%)
rate.
4.6
4.5 10 Yr BNM
AAA * Last trade refers to last trade occurred within one month from
Indicative issuance
09
09
09
09
09
09
09
09
09
09
09
09
09
09
22-Apr-
24-Apr-
26-Apr-
28-Apr-
30-Apr-
Level
02-May-
04-May-
06-May-
08-May-
10-May-
12-May-
14-May-
16-May-
18-May-
2.15 Case Study 1 – Before and After RPS (cont)
Before RPS After RPS
SPREAD MARKET YIELD SPREAD MARKET YIELD
BOND NAME BETWEEN VALUE MOVEMENT IN BOND NAME BETWEEN VALUE MOVEMENT IN
TRADE DIFFERENCE BNM INDICATIVE TRADE DIFFERENCE BNM INDICATIVE
LEVEL TO (RM) AAA CURVE LEVEL TO (RM) AAA CURVE
COUPON BETWEEN ISSUE COUPON BETWEEN ISSUE
(bp) DATE AND ONE (bp) DATE AND ONE
MONTH AFTER MONTH AFTER
(bp) (bp)
3-year AAA
Conclusion :
5-year AAA
Bond From RPS Bond From
does help
-35 2,304,000 -15 1 (60,000) 9
Property Property
Corporate Corporate
reduce this borrowing spread
at the primary level.
7-year AAA 10-year AAA
Bond From Bond From
Property -97 16,796,000 -16 Property -4 300,000 11
Corporate Corporate
Monetary loss from coupon at last point : Monetary loss from coupon at last point:
19,100,000 240,000
(RM) (RM)
Total Issuance Size (RM) 500,000,000 Total Issuance Size (RM) 200,000,000
Percentage of Monetary Loss % 3.82% Percentage of Monetary Loss % 0.12%
2.16 Case Study 2 – Post Issuance with RPS
Company A, Telco issued 8 senior Islamic MTN on 28-Dec-2007
Nominal Loss At
Last Trade Last Trade
Bond Name Last Trade Yield
Date * Yield (%) * Total Loss From Nominal Amount With Last
(mil)
Trade Transaction Within A Month Example
Company A, Telco IMTN
5.35% 28.12.2012 - MTN 18-Jan-08 5.20 RM 3.84
No. 1 Seven were traded within the month from issuance
with turnover volume of 699 Million
5.55% 27.12.2013 - MTN 28-Jan-08 5.30 RM 24.13
No. 2 Total loss from nominal amount with the last set of
Company A, Telco IMTN trades amounted to RM 92.44 Million
5.65% 26.12.2014 - MTN 28-Jan-08 5.50 RM 17.40
No. 3
5.75% 28.12.2015 - MTN 15-Jan-08 5.60 RM 14.73
No. 4
5.90% 28.12.2016 - MTN 22-Jan-08 5.80 RM 12.24
No. 5
Company A, Telco IMTN * Last trade refers to last trade occurred within one month from issuance
6.10% 28.12.2017 - MTN 25-Jan-08 6.03 RM 9.18
No. 6
7.10% 28.12.2022 - MTN 25-Jan-08 7.00 RM 10.92
No. 8
3.0 Deliverables
Signing of Appointment Letter / Agreement for the RPS
Issuer submits the relevant documentation to BPAM

10 Business
Days
BPAM will deliver the Reference Pricing Rationale after

receiving the complete set of documentation
Upon
Request
After the issuance date is fixed, BPAM will provide the Final
Reference Pricing Update upon notification by the issuer
3.1 Deliverables (cont)
The Reference Pricing Rationale shall be delivered to you in the form of hardcopy report within a
maximum of ten (10) business days after a complete set of documentation is received.
In the report we provide analyses which cover the following topics:

Market Assessment
Credit Assessment
Yield Assessment
Our view on the FAIR ISSUANCE YIELD
BPAM will also follow up with a final Reference Pricing Update. This will allow you to have access to the latest
market pricing data prior to issue. BPAM will generate this on your notification.
For the duration of the RPS service till issuance of the notes, BPAM would provide a complimentary User ID to
access BPAM’s bond database via the BondStream software or website.
This will allow you to have one-stop, real-time access to yield levels and secondary market information at any
given time.
3.2 Deliverables – RPS Report Sample (cont)
3.3 Deliverables – RPS Report Sample (cont)
3.2 Deliverables – BondStream (cont)
Our custom-designed application :
Bond Database Market Data

• Stock Info • Indicative Money Market rates
• Facility Info • Research and commentaries
• Rating Info • Real time news
• Bond Statistics
• Statistics database Analysis Tools
• Corporate info database • Bond Analysis Tools
• Islamic bond data • Bond Calculator
• W.I Simulator
Trading Data • Favourite bonds
• Real-time Quotes • Bond Advanced Search
• Daily trading activity • Bond Trade search
• Historical trades back to • Custom Report generator
2000
• Trade map Charting
• Market depth • Real-time quote charts
• Daily charts
• Yield curves
• Technical analysis tools
4.0 Fees and Charges
Types of Bonds Fees
Straight Bonds: 0.02% or 2bps on Issuance Size
Fixed Rate / Zero Coupon Bond (Min. fee RM 30k to Max. fee RM 300k)
Hybrid Structures:
Fixed Regular Amortizing Bond
Irregular Amortizing Bond
Callable Amortizing Bond
Callable Multi Step Amortizing
Multi Step Amortizing Bond
Multi Step Bond
Callable Multi Step Upon Negotiation
Floating Rate Note
Flipper / (Fixed , Float Structure)
Callable/Put table Bond
Convertible Bond
Callable Convertible
Multi- Step Callable Convertible
Multi Rating
Multi Tranche, etc
RPS service is only applicable to bonds which are rated and have maturities of more than 1 year at issuance
The above are our list rates. Final pricing will be subject to discussion between the parties
5.0 Subscription Procedure
If you would like to subscribe to the BPAM Reference Pricing Service:
1. Contact our Market Development Team at 03-2772 0888 or email
enquiries@bpam.com.my
2. We will forward you :
• a) An Appointment/Confidentiality Letter
• b) Reference Pricing Service Agreement
3. For BPAM to carry out the analysis, we will need fundamental information on the
proposed issue such as the following:
• a) The Term Sheets / Information Memorandum of the proposed issue.
• b) The Rating Rationale issued by the relevant Rating Agency.
• c) The Trust Deeds in respect of the proposed issue.
• d) Any other documents (e.g. special calculators ) as required.
All non-public documents provided by Issuer shall be kept private and confidential between the 2
parties.
ADDITIONAL PRODUCT LINE FOR ISSUER
I. Post Issuance Preliminary Study (PIPS)

II. Bond Tracker
1.0 Post Issuance Preliminary Study (PIPS)
PIPS provide issuer a preliminary study
on their past issuance against market
traded trend within one months of
issuance.
The traded levels were compared to ;

i) the bonds’ coupon rate for cost of
funding comparison and
ii) its earmarked equivalent BNM Indicative
yield for market trend comparison.
(Subjected to the availability of BNM
Indicative yields published by BNM)
Fees for PIPS : case to case basis
2.0 Bond Tracker
Bond Tracker is a standard data file
which provide issuer a comparison
analysis of BPAM’s MTM prices versus
the traded price on a specify duration.
This is a simple set of data to provide

issuer an up-to-date Mark-to-Market
Prices as well as the trading activity of a
particular issuance on daily basis.
Fees for Bond Tracker : RM 250 per

stock code
* Max 3 months data per file
THANK YOU
No. 17-8 & 19-8, The Boulevard, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, Malaysia
Tel: +603 2772 0888 Fax: +603 2772 0808 Email : enquiries@bpam.com.my

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REDUCING YOUR FUNDING COSTS :

A FORUM FOR EXISTING & POTENTIAL BOND

Reference Pricing Service

I. What is a Bond Pricing Agency

REFERENCE PRICING SERVICE (RPS)

POST ISSUANCE PRELIMINARY STUDY (PIPS)

I. What is a Bond Pricing Agency

Why Fair Valuation?

Increase Managing and Compliance &

• From an origination and underwriting perspective, primary level pricing

• Providing price discovery may assist in financial institutions' compliance to

Not the Definitive Market Price

Shareholders Minimum paid up

3)Reference Pricing Service

4)Post Issuance Preliminary Study (PIPS)

7)Basel II Support Pack

8)RBC Support Pack

9)Customized Data Delivery

I. What and Why

• Greater price transparency where issuers are fully aware of

• Many issuers are dependent on their arranging banks for

• Issuers receive updates on market rates from arranging

The RPS service from BPAM allows issuers to obtain an

To indicate the fair price

• Targeted • The entire • Source for • Is open to all

61-80bp This implies that the bonds were issued at

Number of Matched Highest Deviation Highest Deviation Highest Deviation from

826 3 Years 840bp AA3

Coupon Level to Traded Level Spread

15% 50% of the AAA rated new issuance

Coupon to Traded Level Spread

18% Above 100bp

Coupon to BNM Curve Spread

14% Above 100bp

Traded Yield Level

Traded Yield Level

Traded Yield Level

Traded Yield Level

Traded Yield Level

Monetary loss from coupon at last

Traded Yield Level

Traded Yield Level

Traded Yield Level

Traded Yield Level

7.0 Cost of Capital Monetary loss from coupon at last curve =

Traded Yield Level

% of Monetary Loss = 1.26%

Percentage of Monetary Loss % 3.82% Percentage of Monetary Loss % 0.12%

Signing of Appointment Letter / Agreement for the RPS

Issuer submits the relevant documentation to BPAM

BPAM will deliver the Reference Pricing Rationale after

In the report we provide analyses which cover the following topics:

Bond Database Market Data

2. We will forward you :

I. Post Issuance Preliminary Study (PIPS)

The traded levels were compared to ;

Fees for PIPS : case to case basis

This is a simple set of data to provide

Fees for Bond Tracker : RM 250 per

* Max 3 months data per file

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