Construction company Saudi Binladin Group has issued a SAR700m ($187m) short-term Islamic bond (sukuk)

The deal was 2.5 times oversubscribed, according to the local Sabb, which acted as security agent.

The issue of the bond could help open up a new funding avenue for Saudi corporates, the bank said. “Considering Saudi local market conditions and investors’ preferences, the development of commercial paper in Saudi will enable corporate short-term funding requirements to diversify away from bank sources,” added Sabb.

The Binladin deal was private and offered only to Saudi investors, with buyers including government agencies, insurance companies, mutual funds and individual investors. The maturity of the sukuk has not been disclosed, but short-term issues typically mature within one to two years.

This was the construction company’s second sukuk issue since 2008 when it raised SAR1bn, also through a private placement with Saudi investors.