DUBAI: Saudi Arabia has raised $2 billion in new sukuk, or Islamic bonds, completing its external funding requirements for 2018.

The transaction is the kingdom's second international sale of sukuk after a $9 billion issue last year.

The bond sale was "part of the Ministry of Finance's commitment to the development of the Shariah-compliant debt capital markets," the country's debt management office said in a statement on Thursday.

The kingdom, acting through the ministry of finance, started marketing the notes with an initial price guidance of around 145 basis points over mid-swaps.

The price guidance was tightened to a final spread of 127 basis points over mid-swap, equivalent to a 4.3 percent yield, signalling wide investor appetite for the deal.

Orders topped $10 billion, the Saudi debt management office said.

Citi, HSBC and JPMorgan coordinated the transaction, and worked as joint lead managers together with BNP Paribas, Mizuho and Samba Capital.

The structure of the sukuk is the same one adopted for the 2017 issue, comprising a mudaraba agreement, a form of Islamic investment management partnership, plus a murabaha facility that would trade commodities with a special purpose vehicle.

The sukuk was marketed a day after sources told Reuters that Saudi Arabia was planning to issue a new dollar sukuk.*:nL5N1VX2MS

The paper is due to settle on Sept. 19 and matures in January 2029.

The government has raised a total of $52 billion in international notes, both Islamic and conventional, since it started tapping the international debt markets in 2016 as part of its efforts to diversify its oil-reliant economy.

In April the government sold $11 billion in conventional notes - an amount which covered the country's hard currency funding needs for 2018, the head of the Saudi debt management office told Reuters.

(Reporting by Davide Barbuscia in Dubai; additional reporting by Sudip Roy in London; editing by Jason Neely) ((; +971522604297; Reuters Messaging: