DUBAI- Riyad Bank, which is 43% indirectly owned by the Saudi government, sold $750 million in Additional Tier 1 (AT1) Islamic bonds linked to sustainability at 4%, a bank document showed on Wednesday.

The yield was tightened from initial price guidance of around 4.375% after demand exceeded $3 billion, the document from one of the banks on the deal showed.

Additional Tier 1 bonds, the riskiest debt instruments banks can issue, are designed to be perpetual but issuers can redeem them after a specified period. Riyad Bank's AT1 sukuk will be non-callable for five and a half years.

BofA Securities, HSBC, Riyad Capital and Standard Chartered arranged the deal.

(Reporting by Yousef Saba; editing by Jason Neely, Jane Merriman and David Evans) ((Yousef.Saba@thomsonreuters.com; +971562166204; https://twitter.com/YousefSaba))