Malaysia's DNB closes $1.27bn Islamic financing for next 5G phase

Malaysia's Digital Nasional Berhad has closed 5.2 billion ringgit ($1.27 billion) in syndicated Islamic term financing for the next phase of its nationwide 5G rollout, a facility the company announced last week and describes as among the largest ever arranged for an unlisted Malaysian company. The claim rests on DNB's own account rather than a published league table, but the syndicate behind it was entirely domestic.

Maybank Investment Bank Berhad acted as mandated lead arranger, bookrunner and coordinating arranger, joined as joint mandated lead arrangers by AmInvestment Bank Berhad, CIMB Islamic Bank Berhad, RHB Islamic Bank Berhad and United Overseas Bank (Malaysia) Berhad; AmInvestment also advised DNB. With two Islamic banking arms among the joint leads and the rest of the syndicate either Malaysian or the local arm of a regional parent, a raise of this size placed inside the domestic market, rather than syndicated across the international project-finance market, suggests the credit sat close to the network it finances.

The closing follows two spectrum moves: DNB has activated the full 100MHz of its 3.3–3.4GHz band, known as F0, and converted its entire 240MHz holding into a Spectrum Assignment. The company says the wider band will lift network capacity and cut latency, and expects it to support Massive MIMO, carrier aggregation, 5G Advanced and AI-driven network functions; the network was built to carry nationwide 5G coverage, and the fresh capital funds the next phase of that build.

The part of the structure lenders had to price was ownership. DNB was formed in 2021 by Malaysian network operators to launch nationwide 5G coverage, and five years on the register has settled into three equal operator stakes and one state position, with CelcomDigi, Maxis and YTL Communications holding 22.94 percent each and the Ministry of Finance Inc holding the remaining 31.18 percent as the single largest shareholder. The ministry intends eventually to exit the shared infrastructure agreement while retaining a special share to safeguard national interests, which keeps the state connected to the asset even after the equity goes. An operator-owned network whose biggest shareholder is a government ministry planning to leave is more complicated than a standard infrastructure credit, but the same register explains the syndicate's comfort: the operators sit in the industry the network was built to serve, and the special share gives lenders a state presence that outlasts the exit.

The network has also drawn scrutiny from Prime Minister Anwar Ibrahim's administration over transparency issues, according to Data Center Dynamics. Political attention of that kind travels with a national mandate, and here it attaches to the shareholder that has to execute the exit.

Chief executive Datuk Azman Ismail read the raise as validation, citing "strong confidence in our business fundamentals, operational track record, and long-term role in Malaysia's digital economy." He said the financing gives DNB "a sustainable platform to operate on its own" as it invests in network enhancement and capacity expansion and leans on its expanded spectrum, and he tied the company to the government's "AI Nation" aspirations and to Malaysia's progress under a dual network framework.

Maxis shows where the operator shareholders are spending. The carrier, which holds 22.94 percent of DNB, separately ran an RM30 million project in Melaka that converts tower backhaul from microwave to fiber, a build this publication covered in September. The $1.27 billion sits at DNB's level, financing the shared network above the local builds the operators fund themselves and alongside a state stake the ministry intends to exit.

Set that beside the argument in digital-infrastructure capital: lenders now price the anchor, not the asset. Offtake, mandate, tenant — that is where lenders look for a cash flow they can underwrite. DNB has no data hall to fill and no hyperscaler lease to show. It has a national 5G mandate, a 240MHz spectrum assignment and a shareholder register made up of carriers that need the network to exist. That is what roughly $1.27 billion of syndicated Islamic term financing was placed against.

When the Indonesian AI cloud venture Zankore borrowed $3.1 billion against its shareholder list last month, the real test was how the market priced that paper, rather than the build itself. DNB is a different asset, a mandate and a spectrum licence where Zankore offered compute, and its lenders are underwriting national infrastructure rather than a commercial fleet. The two still pose the same question to the debt market: which promise will it fund, and at what price.

The financing covers the next phase of the rollout. DNB's chief executive says the company is positioned for the dual network framework, but the ministry's planned exit, the three operator stakes and the special share all sit unresolved on the far side of that transition. How DNB is owned and capitalized once the ministry's money is out remains the open question.