View PDF Edition - Islamic Finance News

deals of the year
case study
Axiata Group’s US$158.06 million
yuan-denominated Sukuk Wakalah
Cross Border Deal of the Year
Telecommunications company Axiata Group priced a
CNY1 billion (US$158.06 million) Sukuk Wakalah on the
11 th September 2012, in a deal touted as the world’s largest
yuan-denominated Islamic bond offering to date.
The sale is the first from Axiata’s multi-currency Sukuk program
worth up to US$1.5 billion set up in July 2012.
Structure and pricing
The notes are backed by airtime vouchers, entitling
Sukukholders to a specified number of airtime minutes for onnet
calls on the mobile telecommunications network of Axiata’s
subsidiaries, which comprise units in Bangladesh, Cambodia,
India, Indonesia, Malaysia, Singapore and Sri Lanka. Axiata
said that the Sukuk are the first yuan-denominated notes
utilizing 100% airtime vouchers as underlying assets.
Pricing for the sale closed intra-day, at a profit rate of 3.75%.
Initial price guidance for the notes was at the 4% area, before
it was revised to 3.75-3.85%. The transaction’s final orderbook
of CNY3.5 billion (US$553.63 million) was seven times the
Sukuk’s initial issuance size of CNY500 million (US$79.15
million), allowing Axiata to upsize the offering to CNY1 billion.
Proceeds from the
issuance will pare down
the group’s more
expensive debt facilities
James Maclaurin, the chief financial officer of Axiata, said: “The
ability to raise yuan-denominated funds demonstrates Axiata’s
ability to diversify away from other, more traditional currencies
such as the US dollar and achieve cost-efficient funding. The
proceeds from the issuance will pare down the group’s more
expensive debt facilities and is also in line with our balance
sheet optimization initiatives.”
The Sukuk was listed and quoted on Bursa Malaysia and on the
Singapore Exchange on the 19 th September.
Axiata noted that the issuance is the group’s second benchmark
Sukuk sale for 2012, following a RM5 billion (US$1.64 billion)
offering from its Malaysian subsidiary, Celcom Transmission,
in August 2012. “Both Sukuk issuances are in line with the
Axiata Group’s ongoing group-wide initiative to optimize its
Summary of terms & conditions
Issuer
Obligor
Issuance amount
Trustee
Tenor
balance sheet and improve its financial flexibility, whilst also
demonstrating Axiata’s commitment towards the government
of Malaysia’s efforts to establish Malaysia as an international
Islamic financial center,” it said.
Investors
Axiata SPV2
Axiata Group
CNY1 billion (US$158.06 million)
Axiata SPV2
Two years
Maturity 18 th September 2014
Coupon rate / return 3.75%
Currency
Joint lead
managers and joint
bookrunners
Legal advisors
Shariah advisor
Governing law
Structure /
instrument
Listing
yuan
CIMB Bank (Labuan), HSBC Amanah
Malaysia, Merrill Lynch (Singapore)
Clifford Chance and Adnan Sundra and
Low (for banks)
Allen & Overy and Zaid Ibrahim & Co (for
issuer)
HSBC Amanah Malaysia
English Law
Wakalah
Bursa Malaysia and Singapore Exchange
Axiata said that more than 75 accounts participated in the
Sukuk issuance, attracting interest from investors comprising
asset management firms, financial institutions, insurance
operators, mutual funds and private banks.
Hong Kong investors were reportedly allocated the majority
of the offering at 55%, followed by Singaporean (28%) and
Malaysian investors (13%), with the remainder allocated to
European and other investors. Fund managers received 62%
of the offering, while banks, private banks and companies were
consulting www.IslamicFinanceConsulting.com
www.IslamicFinanceEvents.com
allocated 62%, 22% and 14%, respectively.
www.IslamicFinanceNews.com
www.IslamicFinanceTraining.com
www.MIFforum.com
www.MIFmonthly.com
www.MIFtraining.com
8 March 2013
www.REDmoneyBooks.com