Maxis
Asia Pacific Telecoms Deal of the Year 2002
Maxis
Maxis is the largest mobile operator in Malaysia and enjoys a very strong investor following in domestic capital markets. It was also the source of the largest debt financing to come out of the Asian telecoms market in 2002. The $838 million equivalent multi-currency financing was both structurally complex and had to come in at breathtaking speed to satisfy Maxis' fundraising requirements.
Maxis is a fast-growing player, and had 3.1 billion in net subscribers by the end of 2002. It is controlled by Usaha Tegas Sdn Bhd (and, ultimately T. Ananda Krishnan), and was valued before its IPO in the middle of 2002 at around RM14 billion ($3.7 billion). The main objective for Maxis last year was to complete an initial public offering (IPO), and to this end it arranged for a dollar-denominated bridge loan.
The lead arranger of this $735 million bridge was ABN Amro. This bridge was designed to provide working capital until an IPO could be launched, and had a 364-day maturity. However, the long-term Maxis package was also sized to accommodate the possibility that the issue could not go ahead as planned.
The full debt package will be used to take out the bridge and for working capital purposes, but not all of it was drawn upon. Moreover, debt is provided at various levels in the Maxis capital structure to accommodate existing debt and satisfy regulatory and listing requirements. There are three levels to Maxis ? Maxis Holding, Maxis Communications, and Maxis Mobile.
Holding is where the IPO funds will be distributed, and where the bridge was provided. This received a $235 million offshore loan, priced at between 200bp and 300bp over Libor. Between them is the intermediate holding company, which received a $235 million standby facility. The reason for this was that the IPO had to be completed without debt encumbering the Holding entity, although sources close to the deal say that it presents noticeable tax savings to Maxis.
The most substantial, and long-lasting, debt is at the Mobile level. The lead arrangers ? DBS (the rebranded Development Bank of Singapore), ABN Amro, Barclays Capital and Sumitomo Mitsui Banking Corporation ? provided a loan of $200 million that was subsequently swapped into Ringgit. The other tranche was provided directly in local currency and arranged by RHB Bank, Eon Bank and Commerce International Merchant Bankers.
Two thirds of this RM640 million tranche was underwritten by the arrangers, and reflected the demand for telecoms paper at Malaysian institutions. The domestic banking sector has been a strong supporter of mobile operators, but has exposure limits. The bond market is less beloved of telecoms operators than of other sectors because of its relative inflexibility.
Tenor for the Maxis Holding tranche was 4.5 years and five years for each of the Maxis Mobile tranches. The shares of Maxis Mobile secure the facility. In the Holding company loan, ABN Amro committed $25.7 million, DBS pledged $22.6 million and Barclays Capital and SMBC provided $20.3 million each. Two of the lead arrangers, Citigroup and BNP Paribas contributed $21.6 million and $17.2 million respectively. The other leads, Credit Agricole Indosuez, Credit Lyonnais, Rabobank and WestLB took $18.1 million apiece. Co-arrangers, HSBC and HVB committed $10.8 million each while the other co-arranger Bumiputra-Commerce Bank pledged $13.5 million.
For the $200 million portion, ABN Amro and DBS committed $20.5 million each, and Barclays and SMBC provided $15 million apiece. The lead arrangers Credit Agricole, Rabobank and BNP Paribas each took $13.5 million, while Citigroup committed $18 million, Credit Lyonnais absorbed $15 million, and WestLB absorbed $10 million. Bumiputra-Commerce Bank injected $13.5 million, HypoVereinsbank lent $12 million and HSBC committed $10 million. Senior manager, Chinatrust Commercial Bank, took $10 million.
However, in large part the commitments were either undrawn, cancelled, or quickly repaid. Only the tranches at the Mobile level remain in place, since the Holding tranche was repaid from the IPO, and the Communications standby facility was cancelled. The standby tranche was in place as a contingency, and was cross-guaranteed with the Mobile tranches, but not with the Holding debt.
The IPO went out to great fanfare, and raised RM3.05 billion, from a mixture of retail and institutional sources. It proved successful with both domestic and international investors. RMB Sakura and CIMB led the retail offering, while ABN Amro, Barings and Goldman Sachs led the international offering. It was presented as a strong vote of confidence in Malaysia's economic recovery, and was Asia's largest IPO at the time
Since the deal was inked Maxis has taken over its smaller rival TIMECel for RM1.293 billion. After this acquisition, and with the financings that it has put together, Maxis is comfortably ahead of its rivals. This was in large part the reason for the speed ? Maxis needed to be ahead of its rivals in the IPO queue. Formal mandate letter to financial close was well under two months.
Maxis Refinancing
Status: Signed July 15
Size: $838 million equivalent
Location: Malaysia
Description: Refinancing and working capital
International arrangers: ABN Amro, DBS, Barclays Capital, Sumitomo Mitsui Banking Corp
Domestic arrangers: RHB Bank, Eon Bank and Commerce International Merchant Bankers.
Lawyers to the lenders: Milbank Tweed Hadley & McCloy, Chooi and Company
Lawyers to the borrower: in house, assisted by Clifford Chance
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Maxis
Maxis is the largest mobile operator in Malaysia and enjoys a very strong investor following in domestic capital markets. It was also the source of the largest debt financing to come out of the Asian telecoms market in 2002. The $838 million equivalent multi-currency financing was both structurally complex and had to come in at breathtaking speed to satisfy Maxis' fundraising requirements.
Maxis is a fast-growing player, and had 3.1 billion in net subscribers by the end of 2002. It is controlled by Usaha Tegas Sdn Bhd (and, ultimately T. Ananda Krishnan), and was valued before its IPO in the middle of 2002 at around RM14 billion ($3.7 billion). The main objective for Maxis last year was to complete an initial public offering (IPO), and to this end it arranged for a dollar-denominated bridge loan.
The lead arranger of this $735 million bridge was ABN Amro. This bridge was designed to provide working capital until an IPO could be launched, and had a 364-day maturity. However, the long-term Maxis package was also sized to accommodate the possibility that the issue could not go ahead as planned.
The full debt package will be used to take out the bridge and for working capital purposes, but not all of it was drawn upon. Moreover, debt is provided at various levels in the Maxis capital structure to accommodate existing debt and satisfy regulatory and listing requirements. There are three levels to Maxis ? Maxis Holding, Maxis Communications, and Maxis Mobile.
Holding is where the IPO funds will be distributed, and where the bridge was provided. This received a $235 million offshore loan, priced at between 200bp and 300bp over Libor. Between them is the intermediate holding company, which received a $235 million standby facility. The reason for this was that the IPO had to be completed without debt encumbering the Holding entity, although sources close to the deal say that it presents noticeable tax savings to Maxis.
The most substantial, and long-lasting, debt is at the Mobile level. The lead arrangers ? DBS (the rebranded Development Bank of Singapore), ABN Amro, Barclays Capital and Sumitomo Mitsui Banking Corporation ? provided a loan of $200 million that was subsequently swapped into Ringgit. The other tranche was provided directly in local currency and arranged by RHB Bank, Eon Bank and Commerce International Merchant Bankers.
Two thirds of this RM640 million tranche was underwritten by the arrangers, and reflected the demand for telecoms paper at Malaysian institutions. The domestic banking sector has been a strong supporter of mobile operators, but has exposure limits. The bond market is less beloved of telecoms operators than of other sectors because of its relative inflexibility.
Tenor for the Maxis Holding tranche was 4.5 years and five years for each of the Maxis Mobile tranches. The shares of Maxis Mobile secure the facility. In the Holding company loan, ABN Amro committed $25.7 million, DBS pledged $22.6 million and Barclays Capital and SMBC provided $20.3 million each. Two of the lead arrangers, Citigroup and BNP Paribas contributed $21.6 million and $17.2 million respectively. The other leads, Credit Agricole Indosuez, Credit Lyonnais, Rabobank and WestLB took $18.1 million apiece. Co-arrangers, HSBC and HVB committed $10.8 million each while the other co-arranger Bumiputra-Commerce Bank pledged $13.5 million.
For the $200 million portion, ABN Amro and DBS committed $20.5 million each, and Barclays and SMBC provided $15 million apiece. The lead arrangers Credit Agricole, Rabobank and BNP Paribas each took $13.5 million, while Citigroup committed $18 million, Credit Lyonnais absorbed $15 million, and WestLB absorbed $10 million. Bumiputra-Commerce Bank injected $13.5 million, HypoVereinsbank lent $12 million and HSBC committed $10 million. Senior manager, Chinatrust Commercial Bank, took $10 million.
However, in large part the commitments were either undrawn, cancelled, or quickly repaid. Only the tranches at the Mobile level remain in place, since the Holding tranche was repaid from the IPO, and the Communications standby facility was cancelled. The standby tranche was in place as a contingency, and was cross-guaranteed with the Mobile tranches, but not with the Holding debt.
The IPO went out to great fanfare, and raised RM3.05 billion, from a mixture of retail and institutional sources. It proved successful with both domestic and international investors. RMB Sakura and CIMB led the retail offering, while ABN Amro, Barings and Goldman Sachs led the international offering. It was presented as a strong vote of confidence in Malaysia's economic recovery, and was Asia's largest IPO at the time
Since the deal was inked Maxis has taken over its smaller rival TIMECel for RM1.293 billion. After this acquisition, and with the financings that it has put together, Maxis is comfortably ahead of its rivals. This was in large part the reason for the speed ? Maxis needed to be ahead of its rivals in the IPO queue. Formal mandate letter to financial close was well under two months.
Maxis Refinancing
Status: Signed July 15
Size: $838 million equivalent
Location: Malaysia
Description: Refinancing and working capital
International arrangers: ABN Amro, DBS, Barclays Capital, Sumitomo Mitsui Banking Corp
Domestic arrangers: RHB Bank, Eon Bank and Commerce International Merchant Bankers.
Lawyers to the lenders: Milbank Tweed Hadley & McCloy, Chooi and Company
Lawyers to the borrower: in house, assisted by Clifford Chance
Back to contents
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