RIYADH: The Saudi Binladin Group, one of the major contractors in the region, announced on Saturday that it had repaid its maturing short term SR700 million sukuk on its maturity date of April 12, 2011.
The sukuk, settled through Tadawul, was originally issued on July 2010 and was the first short-term sukuk ever in the Saudi market.
This short-term sukuk, which was solely led by HSBC Saudi Arabia Ltd, attracted strong demand from the market and was more than 2.5 times oversubscribed.
The innovative instrument balances well the short funding needs of Saudi corporate issuers while offering an attractive yield pick up to Saudi investors.
A statement released by the group in Jeddah on Tuesday said: "We are very grateful to the Capital Markets Authority and Tadawul for the strong support and guidance provided in introducing such a short term instrument to the Saudi debt capital markets. Short-term sukuks have the potential to play a significant role in attracting Saudi investor funds to support key infrastructure projects. It provides an excellent opportunity to both investors seeking good quality investment opportunities and issuers seeking diversified liquidity sources. The smooth and efficient settlement of the Sukuk Al-Murabaha on April 12, 2011 is a testimony to the continuing development and efficiency of debt capital markets in Saudi Arabia and the group is privileged to be a part of this landmark event."
Walid Khoury, CEO of HSBC Saudi Arabia, said: "HSBC is grateful to play a part in this debut short term sukuk and we would like to thank all parties who worked on the successful closure and settlement of the sukuk. The process was very smooth and this demonstrated the high quality and maturity of the Saudi Debt Capital Markets."
© Arab News 2011
