KUALA LUMPUR, Sept 12 (Reuters) - Malaysia’s leading mobile phone operator Axiata Group Bhd said it has priced the world’s largest China currency denominated Islamic bond, or sukuk, of 1 billion yuan ($157.85 million) at 3.75 percent due to strong demand.
Axiata’s yuan Islamic bond is the second of its kind after Malaysia’s state investor Khazanah Nasional Bhd offered 500 million yuan of sukuk last year.
The latest yuan Islamic bond issuance is part of Axiata’s multi currency sukuk programme that was established in July this year with a combined value of $1.5 billion.
Axiata said in a statement late on Tuesday that the sukuk was oversubscribed with a final book of more than 3.5 billion yuan of orders, enabling Axiata to boost the size the deal from an initial 500 million yuan to 1 billion yuan.
The initial price guidance was at 4 percent and finally priced at the tightest end of the price guidance at 3.75 percent.
“The ability to raise yuan denominated funds demonstrates Axiata’s ability to diversify away from other more traditional currencies such as the U.S. dollar and achieve cost efficient funding,” Axiata Group Chief Financial Officer James Maclaurin said in the statement.
“The proceeds from the issuance will pare down the group’s more expensive debt facilities and is also in line with our balance sheet optimisation initiative,” he added.
Malaysia’s CIMB Bank, HSBC and Merill Lynch are the joint lead managers and book runners for the sukuk deal.
$1 = 6.3351 Chinese yuan Reporting by Niluksi Koswanage; Editing by Jacqueline Wong