S&P rates Axiata notes BBB

Standard & Poor’s said it assigned a BBB long-term issue rating to a proposed sukuk drawdown from the $1.5 billion senior unsecured multi-currency sukuk program of Axiata Group Bhd.

The notes will be issued by Axiata SPV2 Bhd., a wholly owned subsidiary of Axiata.

The agency also said it affirmed the BBB+ rating, axA+ Asean regional scale rating and stable outlook on Axiata Group.

The rating on the proposed sukuk trust certificates is the same as that on Axiata’s senior unsecured notes. This is because the obligations to the sukuk holders will rank pari passu with the senior unsecured debt obligations of Axiata, S&P said.

The proceeds will be used for merger and acquisition activities and general corporate purposes, the agency said. The company recently acquired Ncell Pvt. Ltd., which is a large mobile operator in India.

Axiata’s debt-to-EBITDA ratio will be close to 2x following the acquisition and with rising capital expenditure, S&P said.

However, the agency said it expects the company to take the necessary steps to sustain its leverage at less than 2x.

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