by PRIYA VASU / pic by MUHD AMIN NAHARUL

KHAZANAH Nasional Bhd returned to the US dollar sukuk market by raising a total US$1 billion (RM4.12 billion) from a dual-tranche offering.

The sovereign fund made a dual-tranche offering comprising a five-year US$400 million sukuk due 2026 and a 10-year US$600 million sukuk due 2031.

In a statement yesterday, Khazanah stated the sukuk will be issued via a Labuan incorporated special-purpose vehicle called Dua Capital Ltd.

In 2016, Khazanah issued its first US dollar-denominated sukuk, structured under the Shariah principle of Wakalah.

The sukuk was launched at initial price guidance of 125 basis points (bps) over the five-year US Treasury yield and 150bps over the 10-year US Treasury yield.

The transaction garnered strong demand across Asia, Europe and the Middle SEast, and the orderbook was at a high of US$6 billion when Khazanah revised the price guidance tighter by 40bps and 30bps to finally print the sukuk at a profit rate of 1.658% and 2.780% respectively, the fund noted.

The sukuk, each of which is structured under the Shariah principle of Wakalah utilising Shariah-compliant shares and Shariah-compliant commodities, will be listed on Bursa Malaysia Securities Bhd (under an Exempt Regime) and the Singapore Exchange Securities Trading Ltd.

“The overwhelming demand reflects investors’ confidence in Khazanah’s credit and our ability to deliver the mandate as Malaysia’s sovereign wealth fund. This issuance will extend our liability duration as we continue to rebalance our portfolio,” said Khazanah CFO Faridah Bakar Ali (picture).

Proceeds from the issuance will be utilised for general investments, refinancing of borrowings and working capital requirements of Khazanah which are Shariah-compliant.