Saudi Binladin Group has completed a SR1bn ($267m) sukuk issue, the third time in as many years that the firm has tapped local capital markets for funding.

In July 2010 the company sold a SR700m sukuk to local investors and followed this with a SR1bn deal in July 2011. All the deals have been issued with a tenor of 364 days and a profit rate of 2.5 per cent.

The UK’s HSBC advised on the deal, as it had done on previous issues by the firm. Clifford Chance acted as legal adviser on the deal.

Saudi Arabia’s local sukuk market has been becoming increasingly active over the past 12 months. The deals are denominated in the local currency and investment is limited to locals. Sukuk issuance has been surging across the Middle East, with $13bn of new deals completed in the first half of the year, compared to just $5.5bn in the whole of 2011.

A SR15bn deal by Saudi Arabia’s General Authority for Civil Aviation in January has prompted a wave of Saudi companies to follow suit. The Sadara Chemical is also planning to issue a sukuk before the end of the year.