PETALING JAYA: Khazanah Nasional Bhd has priced a dual-tranche offering of a five-year and a 10-year sukuk with a nominal value of US$400 million (RM1.65 billion) and US$600 million (RM2.47 billion) respectively.
The sukuk will be issued via a Labuan-incorporated special purpose vehicle Dua Capital Ltd.
In 2016, the sovereign wealth fund issued its first US dollar-denominated sukuk, structured under the syariah principle of wakalah. The sukuk was launched at an initial price guidance of 125 basis points (bps) over the five-year US Treasury yield and 150bps over the 10-year US Treasury yield and found strong demand across Asia, Europe and the Middle East. The order book was at a high of US$6 billion when Khazanah revised the price guidance tighter by 40bps and 30bps to finally print the sukuk at a profit rate of 1.658% and 2.78% respectively.
The fund elaborated that the sukuk is structured under the syariah principle of wakalah utilising syariah compliant shares and commodities. It will be listed on Bursa Malaysia Securities Bhd and the Singapore Exchange Securities Trading Ltd.
“The overwhelming demand reflects investor confidence in Khazanah’s credit and our ability to deliver the mandate as Malaysia’s sovereign wealth fund. This issuance will extend our liability duration as we continue to rebalance our portfolio,” said Khazanah CFO Faridah Bakar Ali in a statement.
Proceeds from the issuance will be utilised for general investments, refinancing of borrowings and working capital requirements of Khazanah which are syariah compliant.
For the exercise, CIMB, DBS Bank Ltd, JP Morgan, MUFG and OCBC Bank acted as joint lead managers and joint bookrunner, while KFH Capital and Warba Bank acted as joint lead managers.
