Bahri, a global leader in logistics and transportation, has said its SR3.9 billion ($1.04 billion) Saudi riyal-denominated seven-year senior unsecured Sukuk has been oversubscribed by 1.95 times.

The proceeds from the issuance will be used to refinance the company’s existing SR3.9 billion Sukuk maturing in July 2022.

The seven-year senior unsecured Sukuk was issued by way of a Private Placement offer at a competitive floating profit rate of 120 basis points above the six-month Saudi Arabian Interbank Offered Rate (Saibor) and open to Saudi institutional and qualified investors.

Key milestone

Eng Ahmed Ali Alsubaey, CEO of Bahri, said: “This strategic transaction represents a key milestone for Bahri and highlights the confidence investors have placed in the company, which is greatly valued by our Board of Directors and management team at large. It is a proud moment for Bahri as it also complements one of the objectives of the Financial Sector Development Programme under Saudi Vision 2030 to develop and deepen the capital markets in Saudi Arabia. It also demonstrates our trust in the local debt markets by raising a significant amount of funds from various local investors.”

The issuance of Bahri’s new Sukuk has achieved the objectives of the company’s size, diversification, and cost of funding. Significant investor diversification was accomplished with sizable participation from key government Funds, asset managers, pension funds, and Islamic and conventional banks, with a final order book closing at a value almost doubling the expected one.

Excellent outcome

Eng Fayez Al-Asmari, CFO of Bahri, added: “Despite the adverse market environment, Bahri’s Sukuk achieved almost two times oversubscription and was able to diversify away from bank investors, and as a result, strengthened the quality of the order book by allocating a significant amount of the funds raised to asset managers, pension funds and corporate investors. This excellent outcome not only exceeds expectations, but also sends a positive note to investors and creditors that Bahri’s credit history is valued and endorsed by the investor community. We would like to thank HSBC Saudi Arabia, SNB Capital, and Al Rajhi Capital, whose role was instrumental in helping us achieve our key objectives and ensure timely execution of the transaction.

The joint lead managers of the transaction were SNB Capital, Al Rajhi Capital, and HSBC Saudi Arabia. The lead coordinator was HSBC Saudi Arabia, which also acted as Sukuk holders’ and payment agent.

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