TNB to issue sukuk worth RM12b to fund future expenses

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KUALA LUMPUR (June 30): Tenaga Nasional Bhd (TNB) said it is raising up to RM12 billion via two sukuk programmes for future capital expenditure, investment, general corporate purposes and working capital requirements.

The two programmes are the Islamic Medium Term Notes (IMTNs) amounting to RM10 billion and the Islamic Commercial Papers (ICPs) worth RM2 billion, with a tenure of 50 years and seven years respectively.

“TNB on June 30 (today) lodged the Sukuk Wakalah programmes with the Securities Commission Malaysia (SC),” the group said in a filing with Bursa Malaysia.

The national utility company said it may also utilise the proceeds to refinance any existing financing facilities of TNB or its subsidiaries and to defray any fees and expenses for the two Islamic bond programmes.

“The Sukuk Wakalah programmes will provide TNB and its subsidiaries with the flexibility to time fundraising exercises with varying nominal value and tenures for optimal asset-liability matching. TNB will also be able to access a diversified pool of investors in the local capital market,” it added.

TNB said the IMTN and ICP programmes had been assigned final ratings of AAA and P1 respectively by RAM Rating Services Bhd.

Bloomberg, quoting sources, reported late last year that TNB was considering setting up a RM10 billion Islamic bond programme as it braced for electricity-sector reforms.

“TNB, the dominant power supplier across Peninsular Malaysia and Sabah, is bracing for the government’s move to lower prices for consumers by opening up the retail electricity sector,” the report said.

TNB last tapped the domestic debt market in October 2017 when it sold RM3.67 billion of Islamic bonds, part of a RM5 billion programme started that same year, according to Bloomberg.

On Bursa Malaysia, TNB’s share price settled six sen or 0.52% higher at RM11.62 today, with a market capitalisation of RM66.29 billion.