RIYADH: The Saudi Binladin Group (SBG) issued a SR700 million ($187 million) sukuk al-murabaha last week. The privately placed sukuk was offered to Saudi investors and issued through Saudi Binladin Sukuk Co.
HSBC Saudi Arabia was the sole lead manager and bookrunner for the transaction. SABB acted as the security agent while SABB Securities was the sukuk holder's agent, payments administrator and inter creditor agent.
The sukuk issuance was oversubscribed more than 2.5 times and has achieved several notable firsts, including the first short-term issuance in Saudi Arabia, the first credit enhanced structure incorporating the sharing of assigned government contract payment, and the first issuance to be issued on a zero coupon, discount to maturity basis.
A statement released by the Saudi Binladin Group in Jeddah on Tuesday said: "We are extremely gratified with the overwhelming response to this sukuk issuance. The issue has attracted attention from a wide cross section of qualified investors, including corporations, mutual funds, government agencies, insurance companies and individuals. We believe that this strong response to our second sukuk issuance is a reaffirmation of investors' faith in SBG and is a testimony to SBG's position as a leading Saudi Arabian business conglomerate playing a substantive role in the country's infrastructural growth and development."
Walid Khoury, CEO of HSBC Saudi Arabia said, "Having led SBG's debut sukuk issuance in 2008, we are proud to have brought their second sukuk issuance to the market as well. This sukuk contains several important innovations and provides a well-structured, short-term, domestic investment alternative to investors in Saudi Arabia. It is as such, an important step in the continuing development of the Saudi Arabian debt capital markets. Considering Saudi local market conditions and investors' preferences, the development of commercial paper in Saudi Arabia will enable corporate short-term funding requirements to diversify away from bank sources."
The sukuk al-murabaha has attracted the highest number of primary investors of any sukuk ever issued in Saudi Arabia and is expected to prove to be an attractive alternate financing source to support local issuer requirements.
© Arab News 2010
