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Monday, 20 August 2012

Malaysia: Celcom prices RM5bil sukuk; RM3bil issue draws strong demand

KUALA LUMPUR: Celcom Axiata Bhd has successfully priced its sukuk issuance of RM5bil in nominal value, of which RM3bil received a final book of RM10bil via bookbuilding process.
In a statement yesterday, Celcom said the RM3bil sukuk attracted strong demand from asset management companies, financial institutions, insurance companies and corporate organisations. The remaining RM2bil was privately allocated to strategic investors in eight, nine and 10-year tranches.
Celcom said the RM5bil sukuk was the largest rated sukuk murabahahissuance based on a tawarruq arrangement in the Malaysian debt capital market to date.
The sukuk was issued through its unitCelcom Transmission (M) Sdn Bhd (CTX)and has been assigned a preliminary rating of AAAIS with a stable outlook by Malaysian Rating Corp Bhd (MARC).
MARC said the rating reflected the credit strength of the overall consolidated entity, premised on the significant financial and operational links between Celcom, CTX and fellow subsidiary, Celcom Mobile Sdn Bhd (CMSB). It said the proceeds from the sukuk offering would be largely used to retire existing debt of RM4.2bil.
Celcom CEO Datuk Seri Shazalli Ramly said the demand for the sukuk was overwhelming, which coupled with the highest credit rating achievable, indicated the capital market's confidence in Celcom and its long-term business sustainability.
“Celcom's landmark sukuk issuance is testimony to Celcom and Axiata Group Bhd's support for the Government's efforts to position Malaysia as a global Islamic financing hub while reaffirming Malaysia's position as a leader in the global Islamic capital market,” he added.
Proceeds from the sukuk issuance, with tenures ranging from three to 10 years, will be utilised primarily for the refinancing of CTX's existing debt as well as to finance the company's capital expenditure and working capital requirements.
The successful refinancing is part of Axiata Group's active capital management efforts, and is estimated to save over RM350mil over the remaining tenure of the existing unrated sukuk.
Axiata Group president and group CEO Datuk Seri Jamaludin Ibrahimsaid this was the second Islamic debt programme undertaken by Axiata Group in 2012, following the US$1.5bil equivalent multi-currency sukuk programme, which was the first internationally-rated Asia Pacific multi-currency sukuk programme.
He added: “Both programmes are in line with Axiata Group's on-going group-wide initiative to optimise its balance sheet and improve its financial flexibility, while supporting the Government's vision.
(The Star Online / 16 August 2012)

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