Malaysian telecoms group Axiata has received approval from the Securities Commission Malaysia to establish a US$1.5bn Islamic [sukuk] bond programme.
Axiata claims to be the first Asian telecoms company to set up such a multi-currency sukuk…
Malaysian telecoms group Axiata has received approval from the Securities Commission Malaysia to establish a US$1.5bn Islamic [sukuk] bond programme.
Axiata claims to be the first Asian telecoms company to set up such a multi-currency sukuk programme.
It added that the programme “has an innovative structure which, among other things, allows airtime vouchers, presenting an entitlement to a specified number of airtime minutes on the mobile telecommunications network of subsidiaries of Axiata for on-net calls to be included as a trust asset.”
Islamic finance has been growing in recent years and new instruments, such as the ‘airtime facility’, have been designed to suit operators’ unique requirements.
As lending out money at interest is prohibited under shariah principles, Islamic finance products are generally structured, using an underlying tangible asset whose value determines the amount of the financing (see feature in TelecomFinance magazine 200, April 2012).
The programme is “in line with Axiata’s commitment to support the government’s ongoing initiatives and efforts in positioning Malaysia as an international Islamic financial centre,” Jamaludin Ibrahim, the company’s CEO, said.
It also allows Axiata to tap a larger pool of investors in the Middle East, Asia, and Europe. The operator said proceeds would provide it with “further financial agility for the long term.”
CIMB Bank, HSBC, and Merrill Lynch are joint lead arrangers for the sukuk programme.
Standard & Poor’s assigned a ‘BBB-’ rating to the bonds.
