Best sukuk deal: Khazanah Nasional Berhad
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Best sukuk deal: Khazanah Nasional Berhad

Pushing beyond the boundaries

In September, joint lead managers CIMB, HSBC Amanah and UBS launched the first-ever exchangeable sukuk. The landmark deal was designed to enable issuer Khazanah Nasional Berhad to monetize part of its 40% stake in Telekom Malaysia (TM), improve the future liquidity of TM stock and promote Malaysia as the leading centre for Islamic finance outside the Middle East.

Initially targeted to emerge at $500 million, on the back of a successful investor roadshow the deal was more than six times oversubscribed and so was increased to $750 million – making it the biggest ever equity-linked deal from Malaysia and the biggest equity-linked issue out of Asia ex-Japan in 2006. Ronald Leung, head of Asian equity-linked origination at UBS in Hong Kong, says that the issue was structured to have global appeal, with the result that around one-third of the issue sold into the Middle East. Khazanah managing director Datuk Azman Mokhtar says the paper was sold to a mix of banks, asset managers, insurance companies, pension funds, corporates and high-net-worth individuals. Khazanah is the investment holding arm of the Malaysian government.

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