Overwhelming demand from investors led to an oversubscription rate of more than 9 times from the initial target issue size of RM500.0 million, resulting in an upsized transaction to fulfil demand
SEPANG- Malaysia Airports Holdings Berhad (MAHB) announced today that it has successfully priced and issued RM800.0 million Senior Sukuk Wakalah pursuant to its Sukuk Wakalah Programme of RM5.0 billion in nominal value. The triple-tranche offering comprises of a 5-year RM475.0 million Sukuk, a 7-year RM225.0 million Sukuk and 10-year RM100.0 million Sukuk.
Offered through a book-building process, the Senior Sukuk Wakalah received overwhelming demand from investors with total orders received exceeding RM4.6 billion at peak, translating into an oversubscription rate of more than 9 times from the initial target issue size of RM500.0 million. On the back of the overwhelming oversubscription rate, the Senior Sukuk Wakalah was upsized to RM800.0 million, representing a commendable book-to-cover ratio of more than 5 times at closing.
The strong order book also allowed MAHB to tighten its offering yield, which resulted in a final profit rate of 3.87% p.a., 4.14% p.a. and 4.25% p.a. respectively. The offering was well received by diversified group of investors and predominantly favoured by asset managers and financial institutions, in addition to strong interests by insurance companies which primarily focused on the long ends with longer duration.
Commenting on the successful issuance of the Senior Sukuk Wakalah, Dato' Iskandar Mizal Mahmood, Managing Director of MAHB said, "Operating in one of largest hit industries by the Covid-19 pandemic, the oversubscription reflects market confidence in MAHB's strong fundamentals and strategic direction."
"We are very pleased with the response and support received on our Sukuk offering and would like to thank the investors for their confidence in the sector's recovery and growth trajectory, despite the challenging market landscape amidst the prolonged global pandemic," he added.
The Sukuk Wakalah Programme, which has a perpetual programme tenure, provides the Company with flexibility to issue the Senior Sukuk Wakalah and/or Perpetual Sukuk Wakalah (collectively, the "Sukuk Wakalah") from time to time, subject to the aggregate outstanding nominal value of the Sukuk Wakalah not exceeding RM5.0 billion at any point in time.
The Senior Sukuk Wakalah and the Perpetual Sukuk Wakalah under the Sukuk Wakalah Programme have been assigned an initial rating of AAA and AA2 respectively, with a stable outlook by RAM Rating Services Berhad. The favourable rating accorded to the Sukuk Wakalah Programme reflects MAHB's solid business profile, track record of prudent financial management and the strategic importance of MAHB's business operations to the Government of Malaysia in view of its role as the sole operator of all 39 government-owned airports in Malaysia.
Proceeds raised from the Sukuk Wakalah Programme may be utilized by the Company for Shariah-compliant purposes comprising, amongst others, working capital requirements, capital expenditure, general investments, other general corporate purposes and refinancing of existing and future financings/borrowings of MAHB Group. This landmark financing serves as a "war-chest" to support the Group's business growth plans and strategies moving forward.
HSBC Amanah Malaysia Berhad and Maybank Investment Bank Berhad are the Joint Principal Advisers and Joint Lead Arrangers for the Sukuk Wakalah Programme, whereas HSBC Amanah Malaysia Berhad, Maybank Investment Bank Berhad and RHB Investment Bank Berhad are the Joint Lead Managers for the Sukuk Wakalah Programme.