KUALA LUMPUR: Khazanah Nasional Bhd, via a special purpose vehicle Rafflesia Capital Ltd, last night successfully concluded the landmark issuance of its US$750mil syariah-compliant exchangeable trust certificates, attracting heavy interest from quality global investors.
Making significant inroads into the Middle Eastern and syariah-compliant investor base, the issue was oversubscribed by six times at the price range and initial size at the launch.
The offer was launched with an initial size of US$500mil and upsized due to strong demand.
“Demand was generated from quality investors from the Middle East and elsewhere, and including financial institutions, asset managers, insurance companies, pension funds, corporates and high net worth individuals.
“Proceeds raised from the offerings will be used for additional working capital and general corporate purposes relating to Khazanah's principal activities,'' Khazanah said in a statement last night.
The certificates, exchangeable into shares of Telekom Malaysia Bhd (TM), carry a yield to maturity of 5.07% and an annual periodic payment of 1.25%. The certificates will carry an exchange premium of 19% over the one-day volume weighted average price of TM shares yesterday.
They will be listed on Labuan International Financial Exchange Inc and the Stock Exchange of Hong Kong Ltd.
“Khazanah is pleased to execute the landmark issue which successfully addressed several important objectives simultaneously,'' said Khazanah managing director Datuk Azman Mokhtar.
Besides being a cost effective way to raise funding, the move is in line with Khazanah's long-term commitment to divest progressively stakes in its core holdings to increase market liquidity in an orderly fashion, he added.
The certificates are the largest exchangeable instrument to be issued from Asia ex-Japan so far this year and the largest from Malaysia. In December 2004, Khazanah issued a US$414.5mil exchangeable bond into PLUS Expressways Bhd shares.
UBS Investment Bank acted as the global co-ordinator while CIMB Investment Bank, HSBC Amanah and UBS Investment Bank were the joint bookrunners and lead managers for this issuance.
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