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Capital Markets

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

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, SABB, as well as by the German bank. The Multilateral Investment Guarantee Agency (Miga), which is part of the World Bank and whose mission is to promote foreign direct investment, gave the tranche a guarantee against political risk in Indonesia.

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