Saudi Arabia's Middle East Healthcare Company, the company behind Saudi German Hospitals, has commenced the public offering of its riyal-denominated sukuk.

The initial issuance amount is 1 billion riyals ($266.7 million) with the final amount to be determined based on the market condition after the completion of the offer period, the company said in a statement to Riyadh's Tadawul exchange.

The yield offered is 7.20% per annum payable quarterly while maturity is five years.

The Islamic bonds will be issued under the company's SAR1.5 billion debt programme, which the kingdom's Capital Market Authority had approved late last year, the company had said in an earlier statement.

The sukuk will be issued in denominations of SAR1,000, with minimum subscription of five, Middle East Healthcare said.

Al Rajhi Capital has been appointed as the agent, financial advisor, sole arranger, and dealer.

(Writing by Brinda Darasha; editing by Seban Scaria)