Saudi Hollandi Bank has issued the kingdom's debut subordinated debt instrument, a SR 700 million ($187 million) offering which was priced at 85 basis points over Sibor. Bank officials reported oversubscription, but expectations that the bond would be upsized have not materialised.

Saudi Hollandi and its major shareholder ABN Amroacted as joint lead arrangers of the deal, which has a tenor of seven years, with a five-year optionality. It was an 'exempt offer' under the capital markets law, permitted to be offered only to 60 potential investors.

The issuance is aimed at strengthening the bank's tier II capital base while also demonstrating to the market its marketing and structuring capabilities, as local institutions position themselves for the development of the kingdom's debt capital markets (MEED 10:12:04).