KUALA LUMPUR: Axiata Group Bhd has successfully priced its 10-year US$500 million (RM2.07 million) sukuk, the third issuance under its multi-currency US$1.5 billion sukuk issuance programme established on July 17 2012.
The sukuk will be issued via its wholly-owned Malaysian-incorporated special purpose vehicle, Axiata SPV2 Bhd, and proceeds will be utilised to fund the proposed acquisition of Ncell Pvt Ltd, it said in a statement.
It said the bookbuilding exercise commenced with an initial price guidance of US Treasuries (UST) + 2.60 per cent area.
Demand for the sukuk issuance led to a final price guidance of UST + 2.45 per cent area ± 0.05 per cent at Asian close/London mid with books in excess of US$1.4 billion.
It was finally priced at the tight end of final price guidance, with a final book of over US$900 million orders, representing a bid-to-cover ratio of over 1.8 times, and a final yield of 4.36 per cent.
The issuance by Axiata 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.
“The strong participation from international investors for this sukuk issuance is validation of our solid fundamentals.
“We are pleased that investors are supportive of our aspirations as a regional telecommunications champion,” said Axiata’s president and group chief executive officer Datuk Seri Jamaludin Ibrahim.
The sukuk issuance has been assigned ratings of “Baa2” and “BBB” by Moody’s Investors Service Inc and Standard & Poor’s Ratings Services, respectively.
To be listed on Bursa Malaysia (under the Exempt Regime) and the Singapore Exchange Securities Trading Ltd, it is structured based on the syariah principle of “Wakala”, whereby the underlying assets are 100 per cent airtime vouchers.
This represents an entitlement to a specified number of airtime minutes on the mobile telecommunications network of subsidiaries of Axiata for On-Net calls.
Jamaludin said the sukuk 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 per cent from Asia, 11 per cent from Europe and 18 per cent from the 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.
“Through Ncell, Axiata will be entering the fast-growing brownfield market of Nepal with a controlling stake of its number one telecoms operator,” he added.
He said Ncell, being a rare and opportunistic asset, 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.
Meanwhile, CIMB Bank (L) Ltd, Deutsche Bank AG, Singapore Branch and HSBC Amanah Malaysia Bhd are the joint arrangers of the sukuk programme.
CIMB, Deutsche Bank, The Hongkong and Shanghai Banking Corp Ltd and HSBC Amanah are the joint lead managers and bookrunners for the sukuk issuance. Bernama