Axiata raises RM6.3b via dual-tranche offering

by SHAZNI ONG/ pic by BLOOMBERG

AXIATA Group Bhd has raised US$1.5 billion (RM6.29 billion) via a dual-tranche offering comprising 10-year US$500 million sukuk and a 30-year US$1 billion conventional notes.

The telecommunication giant noted that the issues were done via its wholly-owned special purpose vehicles, namely Axiata SPV2 Bhd and Axiata SPV5 (Labuan) Ltd respectively.

Axiata said the landmark issuances mark its return to the international US dollar debt capital markets since 2016, employing a strategy of issuing both Islamic sukuk and conventional notes to appeal to the broadest possible investor base.

“The transactions represent Axiata’s commitment to proactive management of its balance sheet and extend its debt maturities and optimising its capital structure to match the assets and liabilities, given the long-term nature of the telecommunications business,” it stated.

The sukuk represents the fourth issuance under Axiata’s multi-currency sukuk issuance programme of US$1.5 billion or its equivalent in other currencies established on July 17, 2012.

The notes represent the inaugural issuance under Axiata’s euro medium-term note programme of US$1.5 billion or its equivalent in other currencies established on Aug 10, 2020.

The proceeds from the issuances will be partially used to refinance Axiata’s existing borrowings and the balance to be used for its general corporate purposes, Axiata stated in a release yesterday.

Final orderbooks in aggregate were US$6.8 billion, representing one of the most oversubscribed deals in Asia over the last 12 months, while showcasing Axiata’s strong investor following and robust credit quality.

Axiata said there is strong investor interest towards the issuances, as indicated by the staggering peak orderbook size of US$11.8 billion across the two tranches.

The issuances 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 245 accounts across key financial markets,” it said

The sukuk will be listed, but not quoted for trading, on Bursa Malaysia Securities Bhd (under the Exempt Regime) and will be listed and quoted on the Singapore Exchange Securities Trading Ltd (SGX-ST).

The sukuk is structured based on the Shariah principle of wakalah where the underlying assets comprise 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 notes will be listed and quoted on the SGX-ST.

The 10-year tranche saw the lowest US dollar coupon for a Malaysian corporate issuer across both conventional and Islamic offerings, while the 30-year tranche registered the lowest 30-year coupon for an Asian corporate, the company said.

Axiata’s president and group CEO Tan Sri Jamaludin Ibrahim said this marks Axiata’s first landmark issuance of US$1.5 billion in size from the international capital markets and its single-largest as well as longest dated offering to date, securing strong cross-border participation from a wide and diverse base of investors.

“This has enabled us to achieve the lowest ever 30-year coupon for an Asian telecommunications issuer, and the third-lowest globally.

“The issuances will enhance the group’s capital position greatly, while breaking new grounds in the financing market locally and within the region,” he said.

Axiata’s shares closed unchanged at RM3.15 yesterday, valuing the company at RM28.88 billion.