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

Saudi’s IDB Group pitches for Islamic finance in India

MUMBAI: Saudi Arabia-based Islamic Development Bank (IDB) Group will approach the RBI to highlight the benefits of tweaking rules to allow Islamic finance in India. The meeting comes ahead of Prime Minister Narendra Modi's visit to the Kingdom of Saudi Arabia next month.

Khaled M Al-Aboodi, CEO of the Islamic Corporation for the Development of Private Sector (ICD) — an arm of the IDB, said that he would discuss with the RBI how Islamic finance could complement the existing banking activity. 

Highlighting the advantage of Islamic finance — an interest-free method of providing capital — Al-Aboodi said that there was no excess leveraging in such assets and banks would always have some security. According to Al-Aboodi, in terms of distress Islamic finance worked well as the financier operated as a partner with the businessman.

"During the 2008 global financial crisis, Islamic finance banks had been affected at a much lesser level," he said. IDB has advised other countries that have managed to tweak rules to enable interest-free financing. One of the regulations is facilitation of leasing and buyback of assets by financiers.

Al-Aboodi, who was in India ahead of Modi's visit to Saudi Arabia, said that although IDB lends only to 56 member countries, it worked together with India in getting Indian vendors for projects in developing markets in Africa. "We play a role similar to the Exim Bank's, by financing Indian imports among member countries," said Al-Aboodi. He added that Indian companies were in a position to provide affordable technology.

In India, the IDB is engaged in social development initiatives. One such initiative likely to be signed during the PM's visit is a $50-million financing of mobile medical units in the country. The financing will be through a non-government organization which has been identified for the purpose.

The IDB Group has been present in India since 1983, when it started a scholarship programme under which 4,190 students have benefited, he said, adding it has also helped 250 other projects in the country.

(The Times Of India Business / 17 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

Tanzania: Needy People to Reap From Zakat

THE Wakf and Trust Commission Zanzibar authorities have started giving out tithes (Zakat) to the needy, as promised during the establishment of the Zakat.

No details were given on how much the commission collected and given to the needy, including assistance to the widows and children in schools. Zakat is a form of obligatory- compulsory, or, more recently, voluntary- alms-giving and religious tax in Islam.

As one of the Five Pillars of Islam, Zakat is a religious obligation for all Muslims who meet the necessary criteria of wealth. "Use the Zakat for the intended goal of getting you out of the difficulties," Sheikh Hassan Ali Kombo from the Commission told the beneficiaries and Ms Amina Hassan one the receivers expressed gratitude.

The Commission for Wakf and Trust Properties is a self-managed state institution established by Act No. 2 of 2007. The functions of the Commission includes managing: Wakf property; Trust property; and Estate of deceased Muslim.

The Commission also takes care of Islamic matters with regard to inheritance, Hijja (Pilgrimage), Sadaka (Charity) and Zakat (Tithes).

Furthermore, in the process of managing properties, the Commission administer tenancy agreements, collection of rent/debt; and estate management, development and maintenance of Wakf and Trust Properties.

(All Africa / 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