Saudi Hollandi completes $193m sukuk

04 January 2010

Institution lists issue on stock exchange

Saudi Hollandi Bank has completed a SR725m ($193m), 10-year sukuk issue and listed it on the Saudi stock exchange (Tadawul).

The sukuk pays investors a return of the Saudi interbank offered rate (Sibor) plus 1.9 per cent. According to Saudi Hollandi, this was below the initial price guidance due to strong interest in the deal from local investors. The total order book for the deal was about $3bn. It was therefore oversubscribed more than 14 times.

The local Riyad Capital and Saudi Hollandi Capital acted as lead managers and bookrunners on the deal.

The deal is the second time that Saudi Hollandi has raised money through a sukuk in the past 12 months. In December 2008, the bank raised $207m through a privately placed sukuk priced at 200 basis points over Sibor.

The latest 10-year deal has an option to be repaid at year five, and the proceeds will be used to boost the bank’s tier 2 capital, a key measure of a bank’s financial strength which can be used to cushion future losses.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.