KUALA LUMPUR (Aug 13): Axiata Group Bhd has secured the lowest ever coupon rate as an Asian corporate after getting a landmark US$1.5 billion issuance.
The telco group said it has priced a dual-tranche offering comprising a 10-year US$500 million sukuk and a 30-year US$1 billion conventional notes which will be issued via its wholly-owned special purpose vehicles, Axiata SPV2 Bhd and Axiata SPV5 (Labuan) Ltd.
According to Axiata, the 10-year tranche saw the lowest US dollar coupon for a Malaysian corporate issuer across both conventional and Islamic offerings whilst the 30-year tranche registered the lowest 30-year coupon for an Asian corporate.
The group said the book building exercise was conducted yesterday and received strong investor interest towards the Issuances.
It said the Issuances were priced at US Treasuries UST + 1.48% (10 year) and UST + 1.7% (30 year), with the final orderbook size of US$3.8 billion or a bid-to-cover ratio (BTC) of 7.6 times and US$3 billion or BTC of 3 times for the sukuk and notes, respectively.
“This marks Axiata’s first landmark issuance of US$1.5 billion in size from the international capital markets and our 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,” Axiata’s president & group chief executive officer Tan Sri Jamaludin Ibrahim said in a statement.
He added that the issuances will enhance the group’s capital position greatly, while breaking new grounds in the financing market locally and within the region.
“In addition to demonstrating Axiata’s ability to access the debt capital markets, this successful conclusion further affirms international investors’ confidence in the long-term fundamentals and resilience of the Malaysian economy and its ability to swiftly scale towards recovery in the aftermath of COVID-19 triggered challenges,” Jamaludin said.
Meanwhile Axiata’s deputy group chief executive officer Datuk Izzaddin Idris said the group is encouraged by the strong support evidenced by the oversubscription of the issuances which peaked at nearly 12 times across the two tranches as well as the tightening of the credit spread by 52 and 50 basis points respectively for the sukuk and notes, from the initial price guidance.
“Despite having gone to market under the ‘new normal’ circumstances, Axiata was able to successfully capitalise on the historical low interest rate environment to achieve our objectives of optimising our debt maturity profiles and reducing our financing costs which will translate to better preservation of liquidity for the group,” he added.