Malaysian property developer Putrajaya Holdings Sdn Bhd plans to sell 2 billion to 3 billion ringgit ($526 million to $789 million) of Islamic bonds to refinance debt and to fund new projects, sources close to the deal said. The bonds, the issue of which could be spread over two years, have been approved by the firm's directors but the exact size and maturity of the deal was still being finalised, the sources said.
Local lenders CIMB and AmMerchant Bank are working on the deal, the sources said.
State-linked Putrajaya Holdings was set up in 1995 to develop Malaysia's new administrative capital of Putrajaya.
National energy firm Petronas owns 64.4 percent of Putrajaya Holdings and state investment arm Khazanah Nasional Bhd has a 15.6 percent stake, according to information posted on the company's website.
The issuer has a long-term rating of AAA from Malaysian Rating Corp Islamic bonds are governed by Sharia law which forbids interest payments, considered usury by Muslims. Istead, investors receive payments based on profits from approved investments.