Sime Darby issues RM2.2b Sukuk, oversubscribed 1.8 times

KUALA LUMPUR: Sime Darby Bhd has made its first issuance of RM2.2bil Sukuk Wakalah, with a tenure of perpetual non-call of 10 years to manage its gearing level.

The plantations-property heavyweight said on Thursday with a strong order book via a limited book-build, the Sukuk offering was over 1.8 times oversubscribed from its initial target.

This allowed Sime Darby to upsize and price the offering at the final yield of 5.65% per annum.

Proceeds raised from issuance(s) under the Sukuk programme would include refinancing the group's debt obligations and working capital requirements.

The 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 Shariah principle of Wakalah.

Sime Darby president and group chief executive Tan Sri Mohd Bakke Salle said 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”.

“We are encouraged by the strong support shown by investors and this also indicates the market’s continued confidence in Sime Darby,” he said. 
 
The Sukuk Programme has been assigned a rating of AAIS by Malaysian Rating Corporation Bhd and MARC has accorded 50% equity credit on the issuance which fits well with the group’s deleveraging initiatives.  

Maybank Investment Bank Bhd is the principal adviser/lead arranger/lead manager for the Sukuk programme.