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Islamic finance: Saudi Telecom’s Axis scores record deal

Complex financing comprises three facilities; Biggest Islamic deal for private-sector borrower


 

Indonesia’s Axis completes $1.2 billion deal



One of the biggest and most complex Islamic financings was completed last month after nearly two years’ work.

The Indonesian subsidiary of Saudi Telecom raised $1.2 billion through a triple-tranche transaction that involved China’s development bank, Sweden’s export credit agency and the World Bank. The financing required a Shariah-compliant structure that included a political risk guarantee and risk management solutions to mitigate currency and interest-rate risks.

The transaction was for Axis, 80.1% of which is owned by Saudi Telecom, 14.9% by Malaysia’s Maxis and the rest by a local investor. Saudi Telecom also owns 25% of Maxis.

The first part of the deal comprised a $450 million Saudi riyal and US dollar-dual currency murabaha commercial facility, arranged by HSBC and Deutsche Bank and underwritten by HSBC’s Saudi subsidiary,...


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