Sime Darby raises RM2.2b from landmark sukuk issue

PETALING JAYA: Sime Darby Bhd has completed the first fundraising exercise under its Perpetual Subordinated Sukuk Programme, which is one of the group’s initiatives to manage its gearing level.
The RM2.2 billion perpetual non-call 10-year subordinated sukuk is the largest perpetual sukuk issuance globally by a non-bank, the largest ringgit perpetual sukuk issuance so far, and the first perpetual sukuk globally based on the syariah principle of Wakalah.
“The perpetual sukuk is part of our deleveraging efforts and we are proud that this innovative financing instrument has established a landmark in Islamic finance,” Sime Darby president and group chief executive Tan Sri Mohd Bakke Salle said in a statement yesterday.
With a strong order book via a limited book-build, the sukuk offering was over 1.8 times oversubscribed from its initial target, allowing Sime Darby to upsize and price the offering at a final yield of 5.65% a year.
“We are encouraged by the strong support shown by investors and this also indicates the market’s continued confidence in Sime Darby,” Mohd Bakke said.
Sime Darby plans to use the proceeds largely for refinancing of its debt obligations.
The sukuk programme has been assigned a rating of ‘AAIS’ by Malaysian Rating Corporation Bhd, which has accorded 50% equity credit on the issuance, which fits well with the group’s deleveraging initiatives.
Maybank Investment Bank Bhd was the sole principal adviser, lead arranger and lead manager of the sukuk programme.