Sime Darby Sukuk ten times oversubscribed (By IFN)

Sime Darby Sukuk ten times oversubscribed

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GLOBAL: Asian investors took up a majority portion of Sime Darby’s US$800 million Sukuk program, which consisted of a five-year US$400 million Sukuk priced at 2.05%, and a ten-year US$400 million Sukuk priced at 3.3%. The issuance is part of Sime Darby’s US$1.5 billion multi-currency facility which was announced at the start of the month. The five-year issuance had attracted 184 orders across Asia and the Middle East and Europe; with a majority of the investors originating from Asia at 83%. The ten-year issuance had seen more interest from overseas investors, with Middle Eastern and European investors constituting 43% of the deal’s buyers. The transaction, according to Mohd Bakke Salleh, president and group CEO of Sime Darby, represented the lowest ever US dollar coupon in the Islamic capital market space by an Asian issuer, and the lowest ever by a Malaysian borrower in the US dollar market. The issuer which is rated ‘A’ by Fitch Ratings, higher than Malaysia’s country ratings, gained major traction across the board mainly due to the conglomerate’s robust fiscal position and a strong long-term outlook due to its diversified sources of revenue spanning plantations to construction. Bakke commented: “We are extremely pleased with our debut issuance and the robust investor response we have received. The confidence the market has placed in us is clear testament to the strength of the group, especially in the longer-term.” The group has revealed that it will use the net proceeds from the issuance to finance working capital requirements, capital expenditure and general corporate purposes.