'There is a good understanding of this sort of instrument - and its attractions - among those institutions and investors that are active in international markets,' says Saud al-Saleh, general manager of SIB. 'We are expecting that the bulk of the issue will be sucked up by financial institutions and they might look to sell it on to their customers.'

The SOLC debt issuance is a landmark transaction that comes on the eve of the issuance of the proposed capital markets law (CML), which is expected to open Saudi Arabia's equity markets and provide the regulatory framework for the development of a debt market. The CML has been approved by the Majlis al-Shoura (consultative council) and is awaiting enactment by the Council of Ministers, which is expected imminently (MEED 3:1:03, Economy).

A leasing company set up in 2001, SOLC specialises in providing medium-term asset finance to Saudi Arabia's small to medium-sized enterprises. Its shareholders are SIB with 28 per cent, the IFC with 10 per cent, the Trade Development & Investment Group with 32 per cent and ORIX Corporation of Japanand ORIX Leasing Pakistan with 15 per cent each (MEED: 20:8:99).