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Thursday, 17 March 2016

Malaysia: Axiata US$500m Sukuk gets strong response


KUALA LUMPUR: Axiata Group Bhd’s 10-year US$500mil Sukuk received strong response with a final book of over US$900mil orders, it said.

The telco company said on Wednesday this was a bid-to-cover ratio of over 1.8 times, and a final yield of 4.357%.


“The bookbuilding exercise commenced with an initial price guidance of US Treasuries (“UST”) + 2.60% area. Demand for the Sukuk issuance led to a final price guidance of UST + 2.45% area ± 0.05% at Asian close/London mid with books in excess of US$1.4bil,” it said.

Axiata said the issuance attracted interest from a diverse group of Islamic as well as conventional investors, comprising asset management companies, financial institutions, insurance companies, and sovereign wealth funds, with participation from 64 accounts.

It said the Sukuk would be issued by its Malaysian-incorporated special purpose vehicle, Axiata SPV2 Bhd. 

The Sukuk Issuance is the third issuance under Axiata’s multi-currency Sukuk issuance programme with an aggregate nominal value of US$1.5bil (or its equivalent in other currencies), established on July 17, 2012. 

Proceeds of the Sukuk Issuance will be utilised to fund the proposed acquisition of Ncell Pvt. Ltd. 

The Sukuk issuance has been assigned ratings of Baa2 and BBB by Moody’s Investors Service Inc. and Standard & Poor’s Ratings Services, respectively.
The Sukuk issuance, which will be listed on Bursa Malaysia (under the Exempt Regime) and the Singapore Exchange Securities Trading Ltd, is structured based on the Shari'a principle of Wakala.

The underlying assets are 100% airtime vouchers, representing an entitlement to a specified number of airtime minutes on the mobile telecommunications network of subsidiaries of Axiata for on-net calls.
Axiata’s president  and group CEO Datuk Seri Jamaludin Ibrahim said, “The strong participation from international investors for this Sukuk issuance is validation of our solid fundamentals and we are pleased that investors are supportive of our aspirations as a regional telecommunications champion”. 
He added this Sukuk Issuance, the third drawdown off Axiata’s US$1.5bil multi-currency Sukuk issuance programme, continued to demonstrate Axiata’s ability to access the debt capital markets as it saw strong cross-border participation from a wide and diverse base of investors, with 71% from Asia, 11% from Europe and 18% from Middle East. 
“Charting a new benchmark, we have taken this opportunity to build Axiata’s curve with a 10-year issuance maturing in 2026, in line with our long-term strategy and growth plans. Axiata will continue to look towards opportunities in the capital markets to strengthen our capital base. 

“Through Ncell, Axiata will be entering the fast-growing brownfield market of Nepal with a controlling stake of its number one telecom operator. As a rare and opportunistic asset, 

“Ncell would be immediately accretive to Axiata’s financials when consolidated. At the same time, Axiata’s regional footprint will expand to a total of 10 countries in Asia, strengthening its position to further unlock shareholder returns and sustain long-term growth.” 

CIMB Bank (L) Limited, Deutsche Bank AG, Singapore Branch and HSBC Amanah Malaysia Bhd were the joint arrangers of the Sukuk programme.

CIMB, Deutsche Bank, The Hongkong and Shanghai Banking Corporation Ltd and HSBC Amanah were the joint lead managers and bookrunners for the Sukuk issuance.



(The Star Online / 16 March 2016)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

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