Axiata Successfully Prices USD500 million Sukuk, with a Peak Orderbook of 2.8 times Covered
Kuala Lumpur, 16 March 2016 - Axiata Group Berhad (“Axiata”) has successfully priced its ten-year USD500 million Sukuk (“Sukuk Issuance”) which will be issued via its wholly-owned Malaysian-incorporated special purpose vehicle, Axiata SPV2 Berhad. The Sukuk Issuance is the third issuance under Axiata’s multi-currency Sukuk issuance programme with an aggregate nominal value of USD1.5 billion (or its equivalent in other currencies) (“Sukuk Programme”), established on 17 July 2012. Proceeds of the Sukuk Issuance will be utilised to fund the proposed acquisition of Ncell Pvt. Ltd. (“Ncell”).
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 Limited, is structured based on the Shari'a principle of Wakala whereby 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.
The bookbuilding exercise commenced with an initial price guidance of U.S. 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 USD1.4 billion. The Sukuk Issuance was finally priced at the tight end of final price guidance, with a final book of over USD900 million orders, representing a bid-to-cover ratio of over 1.8 times, and a final yield of 4.357%. 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.
Axiata’s President & Group Chief Executive Officer, Dato’ Sri 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. This Sukuk Issuance, the third drawdown off Axiata’s USD1.5 billion multi-currency Sukuk issuance programme, continues 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.”
Jamaludin concludes, “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 (“CIMB”), Deutsche Bank AG, Singapore Branch (“Deutsche Bank”), and HSBC Amanah Malaysia Berhad (“HSBC Amanah”) are the Joint Arrangers of the Sukuk Programme, while CIMB, Deutsche Bank, The Hongkong and Shanghai Banking Corporation Limited and HSBC Amanah are the Joint Lead Managers and Bookrunners for the Sukuk Issuance. The transaction structure and documents for the Sukuk Issuance have been approved by CIMB Islamic Bank Berhad, Dr. Hussein Hamed Sayed Hassan, the Shari’a Adviser of Deutsche Bank AG, Singapore Branch and the Central Shariah Committee of HSBC Bank Middle East Limited.
As one of the largest Asian telecommunication companies, Axiata today operates in nine countries, servicing approximately 275 million subscribers. With a diverse portfolio in mobile network operations, communications infrastructure services and digital services, the Group pieces together the best in connectivity, technology and people in its vision of Advancing Asia. Axiata has controlling interests under the brand name of ‘Celcom’ in Malaysia, ‘XL’ in Indonesia, ‘Dialog’ in Sri Lanka, ‘Robi’ in Bangladesh and ‘Smart’ in Cambodia, with strategic interests in ‘Idea’ in India and ‘M1’ in Singapore. ‘edotco’, the Group’s infrastructure company, operates in five countries to deliver telecommunications infrastructure services, amassing a portfolio of over 16,000 towers and 12,000 km of fibre. It aims to be one of the top regional tower companies and is committed to responsible and sustainable business operations.
In 2012, Axiata established Axiata Digital (AD) to capture the rapid growth in internet-based businesses. Within three years, AD has built a portfolio of 28 digital brands, servicing growing demands in mobile money, mobile adverting, e-commerce, entertainment and education.
As a committed and long-term investor, Axiata provides employment to 25,000 people within its operations. In line with its sustainability goals, the Group actively supports and drives young talent development; disaster response and recovery; as well as green initiatives.
This announcement does not constitute or form part of any offer to purchase, a solicitation of an offer to purchase, an offer to sell or a solicitation of an offer to sell, securities in the United States or any jurisdiction in which such offer or solicitation or sale would be unlawful.
The Sukuk Issuance has not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") or the securities laws of any state of the United States or other jurisdiction and the Sukuk Issuance may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any applicable state or local securities law. No public offering of securities is being or will be made in the United States or any other jurisdiction. Neither this announcement nor any portion hereof may be sent or transmitted into the United States or any jurisdiction where it is unlawful to do so. Any failure to comply with these restrictions may result in a violation of the Securities Act or the applicable laws of other jurisdictions. A rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the rating agency.