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MAHB completes pricing of its debut RM1.0 billion Perpetual Subordinated Sukuk – World’s First Rated Hybrid Perpetual Sukuk

04 December 2014

SEPANG –Malaysia Airports Holdings Berhad (“MAHB”) announced today that it successfully priced its inaugural RM1.0 billion Perpetual Non-call 10 years (PerpNC10) Subordinated Sukuk based on the Islamic principle of Musharakah, pursuant to its Subordinated Sukuk Programme which together with its Senior Sukuk Programme have a combined aggregate nominal value of up to RM2.5 billion (collectively known as the “Programmes”). MAHB’s inaugural perpetual subordinated Sukuk represents the world’s first-ever rating agency equity content targeted Sukuk hybrid globally and the first rated perpetual Sukuk in Malaysia.

Offered through a book-building process which opened in the morning of 3rd December 2014, robust demand allowed for the price guidance to be tightened. The final order book was in excess of RM5bn, which represents a strong bid-to-cover ratio of 5.5 times. The perpetual subordinated Sukuk was finally priced at the tighter end of the revised price guidance.

The offering was well received by a broad range of investors from high quality accounts including government agencies, financial institutions, asset management companies, insurance companies and corporate accounts.

Commenting on the successful issuance of the Sukuk offering, Datuk Badlisham Bin Ghazali, Managing Director of MAHB said, “We are extremely proud to have successfully issued the world’s first ever rated Hybrid Perpetual Sukuk, a landmark transaction which demonstrates the depth of the Malaysian Sukuk Capital market. It is our privilege to have introduced this innovative instrument which we believe will further enhance Malaysia’s position as a global Islamic financial hub and solidify its position as a leader in the global Islamic capital markets. The strong demand for the first of its kind instrument in the market is a testimony of the confidence investors have in MAHB’s credit, operations and business activities. The issuance will enable the industry to realise the benefits from raising capital through the issuance of hybrid instruments as a cost efficient and non-dilutive capital raising solution that lowers the cost of capital”.

Proceeds from the Sukuk issuance will be used for the working capital requirements, general investments and/or to refinance any existing borrowings/financing of MAHB and/or its subsidiaries, which are Shariah-compliant.

The Subordinated Sukuk Programme has been assigned long-term ratings of AA2 by RAM Rating Services Berhad (RAM). The favourable rating accorded to the Subordinated Sukuk Programme reflects the strong fundamentals of MAHB and the strategic importance of MAHB’s business operations to the Government of Malaysia in view of its role as the operator for the key gateways to the nation.

The Subordinated Sukuk issuance allows MAHB to achieve 50% equity credit from RAM and Moody’s Investor Services, as well as 100% equity accounting treatment under MFRS.

CIMB Investment Bank Berhad, Citibank Berhad, Maybank Investment Bank Berhad and HSBC Amanah Malaysia Berhad (HSBC) are the Joint Lead Managers and Bookrunners for the issuance.

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