S&P gives Axiata SPV2 sukuk BBB+

S&P said it assigned its preliminary BBB+ long-term issue rating to a proposed issuance of dollar-denominated senior unsecured sukuk trust certificates by Axiata SPV2 Bhd., a fully owned subsidiary of Axiata Group Bhd.

The BBB+ rating reflects the rating on Axiata because the transaction fulfills the five conditions of the agency’s criteria for rating, S&P said.

The proceeds will be used to purchase airtime vouchers from Celcom Axiata Bhd., a wholly owned subsidiary of Axiata. These vouchers will form the underlying asset pool for this issuance.

“The sukuk documentation mentions a risk of a revocation event, which would refer to the loss of license to provide telecommunications services by the provider of the airtime vouchers. Under the assumption that the revoked assets are not replaced within 45 days, such a scenario will trigger the early dissolution of the sukuk and the unconditional obligations for Axiata to pay, among other obligations, the outstanding face amount of the sukuk and all accrued and unpaid profits,” S&P said in a press release.

The agency said it expects the issuance to extend Axiata’s debt maturity profile.

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