Putrajaya will likely provide a guarantee on the sukuk bonds that will be issued soon to finance the Federal Land Development Authority's (Felda) acquisition of a stake in Indonesia's PT Eagle High Plantations Tbk (EHP).

Most institutional funds, which are the likeliest parties to subscribe to the bonds, are mandated to purchase high-rated bonds, such as government-backed products, StarBiz says in a report today.

The sukuk bonds will provide half of the RM2.26 billion required by Felda to acquire the 37 percent stake in EHP. According to StarBiz, the other half would be financed through loans from European banks.