Malaysia's largest telecommunications company, Telekom Malaysia Bhd, raised US$500 million from the sale of 10-year bonds with the funds going to refinance existing debt and for working capital, a top offical said today.

"This transaction marks Telekom Malaysia's re-emergence in the international debt capital markets since our last US$300 million bond issue in 2000," Abdul Wahid Omar, Telekom's group chief executive said in a statement.

The offering through Deutsche Bank AG, UBS AG and CIMB was priced at 112 basis points over US Treasuries of the same tenor.

"The bonds were oversubscribed by more than 8.5 times," Abdul Wahid said, adding that investors came mainly from Asia and Europe.

The bonds carry a coupon of 5.25 percent, paid semi-annually, he said.

Telekom Malaysia which is 65 percent owned by the government has around 99 percent of the fixed-line market and 38 percent of the wireless market in Malaysia.

Moody's Investors Service recently upgraded Telekom Malaysia two-notches to a credit rating of A3 from Baa2 while Standard & Poor's reaffirmed its A- rating on the company.