Wednesday, May 30, 2012
RIYADH (Zawya Dow Jones)--Saudi Arabia's General Authority Of Civil Aviation, or GACA, plans to issue two new government-backed Islamic bonds, or sukuk, by the end of 2013 to raise funds for its airport expansion projects, as growing demand pushes the kingdom to open its skies to more airlines, according to a senior official at the authority.
GACA raised 15 billion Saudi riyals ($4 billion) earlier this year through a sukuk sale in the local currency to part finance a new SAR27.1 billion terminal at Jeddah airport.
The first of the planned two new sukuk will likely be issued by the end of 2012 or the beginning of 2013, and will be worth SAR12 billion, Faisal Al-Sugair, vice president at GACA, told Zawya Dow Jones Wednesday. Proceeds from this sukuk will be used to complete the funding for the building of the new Abdul Aziz International Airport in Jeddah, he added.
The SAR12 billion sukuk will likely carry similar terms to the one issued in January, including being backed by the government, and will also be managed by HSBC Saudi Arabia, Al-Sugair said.
The airport authority plans to issue the second sukuk by the third quarter of 2013 but the amount is yet to be decided, Al-Sugair noted, adding funds raised from this debt sale will be used to finance the capacity expansion of the airport at Riyadh.
Saudi Arabia's top aviation authority has plans to launch an estimated $20 billion worth of airport projects by 2020 as it expands to meet growing demand in the Middle East's biggest economy.
The kingdom currently has two main domestic airlines in operation, but is expected to issue new licenses to boost competition in the sector.
-By Ellen Knickmeyer and Summer Said, Dow Jones Newswires, +966-1-279-5252, ellen.knickmeyer@dowjones.com; Twitter: @ZDJnews
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
30-05-12 1437GMT
