HSBC Saudi Arabia Limited has successfully closed the first private placement of Sukuk issue for The Saudi British Bank (SABB). This is the first subordinated Tier II Sukuk transaction which comes in line with the Basel III transitional arrangement requirements in the region.
The size of the issue was SAR 1.5 billion with 5-year tenure. As part of the issue, SABB has offered investors in its senior 2008 SAR 1,705 million notes the options to buy all or parts of their notes if they wished to participate in the new Sukuk issue. The investors had the ability of subscribing to the Sukuk issue with 'new money'.
Fahad Alsaif, Head of Debt Capital Market, Saudi Arabia, said: "This transaction is a continuation of HSBC Saudi Arabia focus in developing financing solutions for its clients and bring innovative structures to the market that meet both the issuers' and the investors' needs. This transaction has introduced many new elements to the market, including exchanging from senior to subordinated notes, which reflects HSBC's unique capabilities in advisory, arrangement, brokerage and assets management in the Saudi and GCC markets"
The Sukuk will support SABB's growth plans and extends the maturity profile of its liabilities while continuing to diversify its sources of funding.
© Press Release 2012
