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SapuraKencana to refinance debt with Islamic paper

SapuraKencana to refinance debt with Islamic paper
SapuraKencana Petroleum (SapKen) will issue debt papers next week, starting with a $200m Islamic medium-term note (MTN) programme, as part of a move to refinance a $2.3bn facility that comes due next February, local reports said.

SapKen said its SapuraKencana TMC unit had signed the transaction documents for its inaugural multi-currency Islamic MTN that would be launched next Tuesday.“Proceeds raised will be utilised to partly refinance SKTMC’s existing financing. The issue is not rated and is structured based on the syariah principle of commodity murabahah (via a tawarruq arrangement),” said SapKen.

The sukuk offering will be the first to be launched under the new Securities Commission Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework effective June 15, 2015.Maybank Investment Bank Bhd is the principal adviser, lead arranger and lead manager for the first issuance under the multi-currency sukuk programme.The group over the past two years has been converting its debts from conventional to Islamic papers to be a syariah-compliant stock.

The issue of unrated paper is seen as the market finding a level from which SapKen's future debt can be priced, and is critical amid current low oil prices.SapKen president and group ceo Shahril Shamsuddin said in a statement that the initial tranche of the US-dollar sukuk to be launched marked the group’s first unrated dollar offerings and further reaffirmed its commitment in promoting syariah-compliant financing.

“The successful launch of the sukuk will further optimise the group’s capital structure and create a benchmark for SapKen’s future sukuk issuance under this programme,” he said.