Yinson Annual Report 2020

316 Notes to the financial statements (cont’d) For the financial year ended 31 January 2020 Yinson Holdings Berhad SECTION 7 ACCOUNTABILITY 45. Perpetual securities (i) By Yinson TMC Sdn. Bhd. (“YTMC”) (a) USD100 million On 25 September 2015, YTMC, a wholly owned subsidiary of the Company issued perpetual securities of USD100 million. The perpetual securities are: • unconditionally and irrevocably guaranteed by the Company; • direct, unsecured, unconditional and unsubordinated obligations of the subsidiary; and • rank at least pari passu with all other present and future unconditional, unsubordinated and unsecured obligations of the subsidiary at all times, save for such obligations as may be preferred by provisions of law that are both mandatory and of general application. The perpetual securities are unrated and are not listed on Bursa Malaysia Securities Berhad or on any other stock exchange bearing no fixed maturity date but are callable 5 years from date of issuance (“First Call Date”) at their principal amounts by YTMC fall due on 25 September 2020. The instrument carries an initial periodic distribution rate of 7% per annum where such distribution rate will subject to annual additional step-up margin of 1% after First Call Date provided that the maximum distribution rate shall not exceed 15% per annum. Pursuant to the terms and conditions of the perpetual securities, YTMC has no obligation to pay any distribution and has the option to elect for distribution deferment at its sole discretion, which does not constitute a default. The perpetual securities may also be redeemed at the option of YTMC upon the occurrence of certain events by YTMC in accordance with the terms and conditions of the perpetual securities. On 25 March 2019, YTMC had fully repurchased and cancelled the outstanding perpetual securities. (b) RM950 million On 8 May 2018, YTMC issued RM950 million Sukuk Mudharabah under its RM1.5 billion Perpetual Sukuk Mudharabah Programme. The perpetual securities are: • unconditionally and irrevocably guaranteed by the Company; • direct, unsecured, unconditional and unsubordinated obligations of the subsidiary; and • rank at least pari passu with all other present and future unconditional, unsubordinated and unsecured obligations of the subsidiary at all times, save for such obligations as may be preferred by provisions of law that are both mandatory and of general application. The perpetual securities are unrated and are not listed on Bursa Malaysia Securities Berhad or on any other stock exchange bearing no fixed maturity date but are callable 15 years from date of issuance (“First Call Date”) fall due on 9 May 2033. The issued instrument carries a periodic distribution rate of 6.8% per annum, distributable semi-annually calculated at the nominal value of securities issued. The distribution rate will subject to an agreed step-up margin of 1% per annum after First Call Date. Pursuant to the terms and conditions of the program, YTMC has no obligation to pay any distribution and has the option to elect for distribution deferment at its sole discretion, which does not constitute a breach of covenant. The perpetual securities may also be redeemed at the option of YTMC upon the occurrence of certain events by YTMC in accordance with the terms and conditions of the perpetual securities. From the Group’s perspective under MFRS 132 “Financial Instruments: Presentation”, the Perpetual Securities is classified as equity because the payment of any distribution or redemption is at the discretion of the Group.