by SHAZNI ONG/ graphic by MZUKRI
TENAGA Nasional Bhd’s (TNB) debut issuance of RM3 billion Islamic medium-term notes under its recently established sukuk wakalah programme of up to RM10 billion in nominal value was well-received by both local and regional investors.
The RM3 billion sukuk was successfully priced on July 29 after a one-day book-building exercise.
Proceeds from the issuance will be utilised for TNB’s general corporate purposes, including working capital and capital expenditure.
The sukuk was oversubscribed by close to four times from the initial size, with orders received at the peak of the book-building exercise amounting to RM7.82 billion from over 41 accounts consisting of fund managers, lifers, pension funds, banks and corporates.
“Due to a successfully executed book-building strategy and robust demand received during the exercise, the transaction was upsized to RM3 billion,” TNB said in a statement yesterday.
To date, the offering marks the largest AAA corporate issuance during the Recovery Movement Control Order period amid the current Covid-19 pandemic.
“It is also the first longest dated (20-year) paper issued by a corporate this year, reflecting strong demand from investors for high quality credit like TNB,” the utility giant said.
The programme has been assigned a final rating of AAA by RAM Rating Services Bhd.
The sukuk wakalah was issued in three tranches, with the issue size of the first tranche at RM750 million over a tenure of 10 years and a periodic distribution rate of 2.9% per annum.
The second tranche has a similar issue size of RM750 million, but a 15-year tenure and periodic distribution rate of 3.25% per annum.
The third tranche, with an issue size of RM1.5 billion, has the longest tenure at 20 years, with a periodic distribution rate of 3.55% per annum.
Upon the issuance of the RM3 billion sukuk wakalah, TNB’s consolidated borrowings will increase by RM3 billion.
Based on its consolidated financial position statement as of March 31, 2020, TNB’s consolidated gearing would then increase to 0.9 time from 0.85 time, it said in an exchange filing.
TNB’s shares closed 1.27% or 14 sen higher at RM11.14 yesterday, valuing the utility group at RM63.55 billion.