Thursday January 24, 2013
Sime maiden US-dollar sukuk oversubscribed 10 times
PETALING JAYA: Sime Darby Bhd’s maiden US dollar-sukuk issuance for a total of US$800mil (RM2.4bil) has been oversubscribed by 10 times, reflecting the conglomerate’s strong order book of more than US$8bil held via 376 orders from high-quality investors.
“This issuance is considered highly successful, notwithstanding the heavy supply in the primary US dollar bond market,” said the company in a statement yesterday.
To be issued in two tranches, the company has priced the US$400mil (RM1.2bil) five-year sukuk issue at a fixed coupon rate of 2.053% and the US$400mil 10-year sukuk issue at a fixed coupon rate of 3.29%.
They represent its debut international US dollar issuance, and its first drawdown from its newly established US$1.5bil multi-currency sukuk issuance programme.
Sime Darby becomes the first Malaysian issuer and the first sukuk issuer globally to issue in the international US dollar debt capital markets this year.
This landmark transaction represents the lowest ever coupon by any corporate globally in the US dollar sukuk market, the lowest ever US dollar coupon in sukuk format by an Asian issuer and the lowest ever coupon by a Malaysian borrower in the US dollar market, in both the five-year and 10-year tenors.
“The confidence the market has placed in us is clear testament to the strength of the Sime Darby group, especially in the longer term,” said president and group chief executive Datuk Mohd Bakke Salleh.
“This is an important step we have taken to ensure sustainable growth in line with the group’s strategy,” he added.
Ahead of the sukuk offering, Sime Darby obtained international ratings from S&P, Fitch and Moody’s for the first time, in which Citi and HSBC acted as joint ratings advisors to the company.
The sukuk is expected to be assigned issue ratings of A/A/A3 by S&P, Fitch and Moody’s respectively. Sime Darby plans to use the net proceeds from the offering for capital expenditure, working capital requirements and general corporate purposes.
It received approval from the Securities Commission on Jan11 for the establishment of the programme. The sukuk programme provides Sime Darby with the financial agility to meet its funding requirements moving forward as it expands its business portfolio globally.
In addition to being a multi-currency programme, the structure will allow the company to tap a wider pool of investors, both conventional and Islamic, from Asia, the Middle East and Europe.
Sime Darby is a diversified multinational conglomerate operating in over 20 countries headquartered in Malaysia.
The six core divisions of the group are plantations, property, industrial equipment, motors, energy, and utilities and healthcare.
The group is also one of the largest companies listed on Bursa Malaysia with a market capitalisation of more than RM57bil.
For the financial year ended June 30, 2012, the group earned a revenue of RM47.6bil and recorded a profit before interest and tax of RM5.9bil.