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|20 September, 2018

Saudi Electricity set to issue $2bln dual-tenor sukuk

The issue is split between $800mln sukuk due in January 2024 and $1.2bln 10-year sukuk

Image used for illustrative purpose. A vehicle drives past workers near power plant number 10 at Saudi Electricity Company's Central Operation Area, south of Riyadh.

Image used for illustrative purpose. A vehicle drives past workers near power plant number 10 at Saudi Electricity Company's Central Operation Area, south of Riyadh.

REUTERS/Fahad Shadeed

DUBAI  - State-controlled Saudi Electricity Co is set to issue $2 billion in sukuk, or Islamic bonds, according to documents seen by Reuters.

Sources told Reuters in July the bond proceeds would be used to partly refinance a $2.6 billion bridge the company raised in January for general corporate purposes and to back its capital expenditure programme. 

The firm, the main electricity producer in the kingdom with an 81.2 percent indirect government ownership, has set at $2 billion the size of the sukuk transaction, the documents showed.

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The issue is split between $800 million sukuk due in January 2024 and $1.2 billion 10-year sukuk. Orders for the deal topped $7 billion.

The paper offers investors 115 basis points (bps) over mid-swaps for the long five-year tranche and 160 bps over mid-swaps for the 10-year notes.

Citi, First Abu Dhabi Bank, HSBC, Mizuho, MUFG, Natixis, SMBC Nikko and Standard Chartered Bank are arranging the bond sale, which is expected to price later on Thursday.

(Reporting by Davide Barbuscia; editing by David Evans and Alexandra Hudson) ((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters Messaging: davide.barbuscia.reuters.com@reuters.net))