RIYADH and LONDON - Allen & Overy LLP and its affiliated office in Riyadh, Abdulaziz AlGasim Law Firm, have advised Saudi Electricity Company (SEC) on the issuance of a SAR7 billion (USD1.87 billion) sukuk, the largest sukuk issue globally to date in 2009 and the first public issuance of 2009 in Saudi Arabia.
The deal involves the transfer by SEC of a portfolio of assets to a custodian, Sukuk Electricity Company, a wholly-owned subsidiary of SEC. The asset portfolio comprises the rights granted to SEC under a Saudi Arabian Council of Ministers Resolution to provide electrical service connections and to levy and receive a one-time charge for each connection. HSBC Saudi Arabia Limited and Samba Capital were joint lead managers on the deal, with the securities receiving an 'AA-' rating from Fitch.
Proceeds raised through the issue will be used by SEC, in part, to fund an investment programme designed to expand its generation capacity and enhance the efficiency of SEC's transmission grid.
Commenting, London-based senior associate Atif Hanif, who also advised on SEC's first sukuk issuance in 2007, said: "This is the largest sukuk issue globally this year, and it is unsurprising that it has come from Saudi Arabia. The domestic Saudi market still has a relatively healthy pool of liquidity and investors willing to deploy it for investment-grade issuers like SEC."
Zeyad Khoshaim, partner at Abdulaziz AlGasim Law Firm said: "This is a landmark deal for the Saudi market and a much needed boost for the regional debt capital markets. We expect the Saudi capital markets to receive a further boost this year with the establishment of a sukuk and bond trading platform by the Saudi Capital Markets Authority to facilitate issuance, improve transparency and enhance market liquidity."
Allen & Overy fielded a multi-jurisdictional team for this deal, spanning both London and Riyadh. The team was led by senior associate Atif Hanif in London and partner Zeyad Khoshaim in Riyadh, assisted by associates Jonathan Marshall and Ahmed Al Bassam (Riyadh). Allen & Overy partners, Roger Wedderburn-Day (London) and Julian Johansen (Riyadh) also advised.
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Notes to editors
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1. Allen & Overy is an international legal practice with approximately 5,000 staff, including some 450 partners, working in 31 major centres worldwide.
2. Allen & Overy has been at the forefront of developments in the burgeoning Islamic finance market having worked on a large number of international sukuk issues to date including what is generally recognised as being the first ever internationally marketed sukuk issue - the Government of Malaysia global sukuk issue in 2002.
3. In this press release 'Allen & Overy' means Allen & Overy LLP and/or its affiliated undertakings.
4. The term 'partner' is used to refer to a member of Allen & Overy LLP or to an employee or consultant with equivalent standing and qualifications or to an individual with equivalent status in one of Allen & Overy LLP's affiliated undertakings.
5. Abdulaziz AlGasim Law Firm is a leading Saudi legal firm known for its expertise and specialisation in Islamic finance, corporate matters, capital markets, and cooperative insurance in the Saudi law context. With lawyers who have experience and a deep understanding of the legal and Islamic law (Sharia) environment in the Kingdom, legal services are provided covering a broad spectrum of capabilities.
For more information, please contact:
Caroline Livesey
London
Email: caroline.livesey@allenovery.com
Tel: +44 20 3088 4380.
© Press Release 2009
