Khazanah prices US$320.8m exchangeable sukuk

PETALING JAYA: Khazanah Nasional Bhd has priced an exchangeable sukuk of US$320.8 million (RM1.27 billion), which will be issued via a Labuan-incorporated independent special purpose vehicle Cindai Capital Ltd.

The exchangeable sukuk will reference the value of H-shares in CITIC Securities Co Ltd, China’s largest securities brokerage.

The state-owned investment fund said in a statement that the exchangeable sukuk, with a tenure of five years and an investor put option exercisable at the end of the third year, was priced through an accelerated book-building process.

“Structured with a zero periodic payment and 0.00% yield to maturity, the exchangeable sukuk achieved the tightest end of the initial guidance at an exchange premium of 40% above the volume weighted average price of CITIC Securities shares on Jan 17, 2018.”

Khazanah said the transaction was fully covered shortly after launch and drew a final demand of 5.5 times book size, with 78 investors subscribing to the exchangeable sukuk comprising long-only funds, hedge funds, arbitrage funds and asset managers across Asia and Europe.

The exchangeable sukuk is structured based on the principle of Wakalah and provides the sukuk holder with the option to receive cash or shares upon exchange.

The exchangeable sukuk will be listed on the Singapore Exchange, Labuan International Financial Exchange Inc and Bursa Malaysia under the exempt regime.

CIMB and JPMorgan are the joint bookrunners and joint lead managers for the exchangeable sukuk.