Celcom Transmission (M) sells US$1.59 billion-worth of Sukuk (By IFN)

MALAYSIA: Celcom Transmission (M) (CTX), a unit of Celcom Axiata which is in turn owned by telecommunications group Axiata Group, has issued RM5 billion (US$1.59 billion)-worth of Sukuk.

In a response to Islamic Finance news, which reported on the 10^th August that CTX was looking at issuing the papers by the end of the month, Celcom said that the Sukuk, of which RM3 billion (US$956.65 million) was sold via a public issuance, was priced at 3.45%, 3.6% and 3.75% for its three, five and seven-year tranches, respectively.

The final pricing of the papers are below initial guidance of 3.5-3.65%, 3.65-3.8% and 3.8-3.95%, it said.

The remainder of the papers were privately placed in tranches of eight, nine and 10 years.

The Sukuk is also touted as the largest rated Sukuk Murabahah based on a Tawarruq agreement offered in the Malaysian debt capital market to-date.

According to a statement, the RM3 billion tranche received over RM10 billion (US$3.19 billion)-worth of orders from asset management firms, financial institutions, insurance companies and corporates.

Proceeds from the offering will be used to refinance CTX’s existing debt and to fund its capital expenditure and working capital requirements. “The successful refinancing is part of Axiata Group’s active capital management efforts and is estimated to save over RM350 million (US$111.64 million) over the remaining tenor of the existing unrated Sukuk,” said Celcom in the statement.

CTX sold a landmark RM4.2 billion (US$1.34 billion) Sukuk Ijarah in 2010.

The company’s latest offering saw the participation of CIMB Investment Bank and HSBC Amanah Malaysia as joint principal advisors and joint lead arrangers. The banks were also joint lead managers and joint bookrunners for the Sukuk, together with Maybank Investment Bank.

According to MARC, which assigned a preliminary rating of ‘AAAIS’ to the Sukuk program, the papers also benefit from a letter of support from Celcom, which would ensure that CTX maintains financial prudence.