Singaporean construction company to issue its maiden Sukuk tomorrow - IFN

Singaporean construction company to issue its maiden Sukuk tomorrow

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SINGAPORE: Swiber Holdings will be issuing its inaugural fixed-rate SG$150 million (US$117.84 million) five-year Sukuk tomorrow, the 2nd August 2013. The company has successfully launched the papers on the 29th July with an issue price of 100% of the certificate’s principal amount. The deal’s order book was also well-received upon launching. Swiber is an integrated construction and support service provider for the oil and gas industry. The Singapore-dollar Sukuk was issued through the company’s SPV, Swiber Capital and is part of a US$500 million multicurrency Islamic trust certificates issuance program established by the issuer. Witnessing strong demand from institutional investors, the deal was launched with a yield lower than Swiber’s existing four-year conventional bond. According to Singapore-based Maybank Kim Eng, the sole arranger and global coordinator for the deal, the competitive yields are attributed to higher investor interest towards the Islamic papers compared to its existing conventional bonds. The papers, which are due to be listed on the Singapore Stock Exchange, were sold to a diversified investor-base comprising institutional investors (96.5%), fund managers (0.7%) and private banks (2.8%). Geographically, potential stakeholders from Brunei reaped a bulk of the orders at 46.3%, followed by Singaporean investors making up 43.7% thereof and Malaysian patrons at 10%. The program is structured under the principle of Wakalah Bi Al-Istithmaar and carries a periodic distribution rate of 6.5% per year, payable semi-annually in arrears. Proceeds from the issuance will primarily be used to refinance the existing debt of the company and its subsidiaries, as well as to finance its working capital and general corporate purposes. Maybank Islamic acted as the deal’s Shariah advisor, while Maybank Kim Eng, Bank Islam Brunei Darussalam and DBS Bank were the joint lead managers for the issuance.