June 22 (Reuters) – Malaysia’s No. 2 telecoms firm Axiata (AXIA.KL) will issue 4.2 billion ringgit ($1.32 billion) of sukuk by end July to refinance existing debt, its chief financial officer said on Tuesday.

Financials

Axiata’s unit Celcom Axiata Bhd will issue the Islamic bonds with tenor of 5, 7 and 10 years, Yusof Annuar Yaacob said.

“Credit markets being reasonably buoyant domestically, we’ve decided to use the opportunity to basically lengthen our tenor from the two years to the 5, 7 and 10 (years) and at the same time, get a fixed rate facility as opposed to floating,” Yusof told Reuters by telephone.

“Interest rates have moved up twice in Malaysia so we think it’s probably a good time to start locking in long-term rates.”

The sukuk would be based on the commodity murabaha structure, he said. CIMB (CIMB.KL) and the investment banking arm of top lender Malayan Banking Bhd (MBBM.KL) are handling the deal.

Axiata had said in January it could sell Islamic bonds to refinance about 4 billion ringgit of borrowings. [ID:nSGE60K0AP]

($1=3.186 Malaysian Ringgit)

(Click on [ID:nISLAMIC] for more Islamic finance stories and ISLAMIC for a speed guide) (Reporting by Liau Y-Sing; Editing by Julie Goh) ((y-sing.liau@thomsonreuters.com; +603 2333 8083; Reuters Messaging: y-sing.liau.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))