Saudi Arabia’s General Authority for Civil Aviation (GACA) has raised a SR15bn ($3.99bn) 10-year sukuk (Islamic bond), that was more than three times oversubscribed.

Proceeds from the deal, which carries a Finance Ministry guarantee, will be used to fund the SR27.1bn development of Jeddah airport. The sukuk has a tenor of 10 years and carries a profit rate of 2.5 per cent. It was completed on 20 Janauray after being launched on 10 January. The UK’s HSBC structured the sukuk programme and advised on the issue.

Foreign investors are prohibited from investing in Saudi Arabian sukuk issues, although bankers in the kingdom say that with pricing so low for a 19-year deal, the GACA issue may not have been attractive anyway. “The issue for foreign investors is would they find the yield attractive enough? In this case, the answer would have been no,” says one banker in Riyadh.