Yinson’s New Sukuk Issuance: 5-Year and/or 7-Year MYR Bonds with IPG of 4.80%–5.00%

• Yinson Holdings Berhad intends to issue 5-year bond with an indicative yield of 4.8% and/or a 7-year bond with an indicative yield of 5.0%, both equivalent to MGS +155 basis points. The total issuance size is expected to be up to RM1 billion, with proceeds to be used for capital expenditure, working capital, and general corporate purposes.

• The bonds are first lien and rated A+ by MARC and A1 by RAM, both with stable outlooks.

• Yinson is a publicly listed global energy infrastructure company with a market capitalisation of RM7.8 billion as of 10 November 2025. As of 1HFY26 (July 2025), approximately 96% of its revenue is generated from the Offshore Production and Marine segment, primarily driven by its Engineering, Procurement, Construction, Installation and Commissioning (EPCIC) activities and Floating Production Storage and Offloading (FPSO) leasing business and actively expanding its renewables and green technologies businesses.

• Following recent news, Yinson plans to privatise by end-2025 to unlock higher valuations through an eventual foreign relisting, possibly in New York within 2-3 years. This move has no impact on existing bonds, as no change-of-control clause has been triggered. Yinson’s outstanding bonds are listed in Table 1.

• The Agogo FPSO achieved first oil on 29 July 2025, four months ahead of schedule, commencing its 15-year lease-and-operate contract with Azule Energy valued at over USD 5.0 billion (RM 21.2 billion).

• As of 1HFY26, Yinson has secured a robust contract backlog of USD 19.9 billion, comprising USD 17.0 billion from ongoing contracts and USD 2.9 billion from projects on option order shown in Table 1. These long-term FPSO leases, primarily in Brazil, Angola, and Ghana, extend up to 2050, providing stable and recurring cash flows that support debt repayments and mitigate short-term liquidity risks.

• In 1HFY26, revenue declined 40% YoY to RM2.6 billion from RM4.4 billion, while operating profit fell 18% YoY due to lower EPCIC contributions following the achievement of first oil for FPSO Maria Quitéria and FPSO Atlanta in 3QFY25 (Oct 24) and 4QFY25 (Dec 24), respectively, while the Agogo FPSO is in the final stages of construction.

• In addition, Yinson Group is progressing well in its transition from a CAPEX-intensive EPCIC phase to an operational phase, expected to generate stable cash inflows over the next 20–25 years.

• Net gearing increased from 259% in 1HFY25 (July 2024) to 277% in 1HFY26, mainly due to higher borrowings for project execution, with net debt-to-EBITDA at 3.0 times. This was partially offset by a robust order book, with an order book-to-net debt ratio of 5.2 times.

• Interest coverage edged down from 2.2 times to 1.4 times, mainly due to a one-off refinancing charge, while the cash-to-short-term debt ratio strengthened from 2.1 times to 3.4 times as of 1HFY26, indicating improved liquidity position.

• Overall, Yinson held RM4.3 billion in cash and bank balances and a robust order book exceeding USD 19.9 billion (RM83.2 billion), which partially offsets its total debt of RM20.4 billion. This provides strong earnings visibility and supports short- to medium-term cash flow stability.

• Under the YNSMK 5.800% 07Dec2026 Corp (MYR) bonds is viewed positively, given its manageable maturity profile.

• Perpetual bonds with first call dates in the next 2–4 years have a high likelihood of being called, supported by BNM’s OPR cut in July 2025 and Yinson’s oversubscription in past issuances. If not called, they will incur a 1% step-up margin.

• The new sukuk’s indicative yield of 4.80%–5.00% is slightly less attractive than Sunsuria Berhad’s upcoming 5-year bond (also rated A+ by MARC) which offers 5.30%.

• Nevertheless, Yinson, Malaysia’s leading FPSO operator, continues to demonstrate solid fundamentals, underpinned by a RM83.2 billion order book. While gearing remains elevated, cash flow is expected to improve as major FPSO projects begin operations. Overall, the sukuk remains attractive for investors seeking stable returns and exposure to a resilient, high-quality energy infrastructure issuer.

• We prefer the 5-year bond, as the 7-year tenure carries greater uncertainties, particularly given the FPSO sector’s exposure to oil price volatility and project execution risks.

• Nonetheless, the 7-year bond is not a deal breaker; Yinson remains a well-managed FPSO operator, and investors with higher risk tolerance may still consider participating in the 7-year issuance.

• Investors should take note that post-delisting, Yinson will become a private entity, meaning its financial and operational information may no longer be as publicly accessible as when it was publicly listed, potentially reducing visibility into its financial disclosure.

• Investors should also consider refinancing risk, softer oil prices and demand, potential contract terminations, and other related factors before making any investment decisions.

• The bonds offer guidance yields ranging from 4.80% to 5.00%. Investors should note that the final issuance price may not necessarily align with the guidance yield.

• For further insights, refer to Credit Update: Yinson Strong FPSO Growth with Capital Raise Amid Credit Strains | Bondsupermart

Table 1: Existing Yinson’s Bond

Table 2: Yinson’s Robust Order Book

Source: Yinson Holdings Berhad, iFAST compilations. Data as of 31 July 2025.

Table 3: Yinson's Bond