(MENAFN - Arab News) The Saudi Hollandi Bank (SHB), the oldest banking franchise in Saudi Arabia, issued a highly successful 7-year subordinated sukuk at a competitive price of instrument raising SR 1.4 billion from a diverse group of investors SIBOR 1.15 percent.
The issuance was marketed to Saudi investors, including government funds, banks, insurance companies, corporates and sophisticated investors. This marks Saudi Hollandi's 4th and largest SR-denominated debt capital market issuance, highlighting its support to the development of the capital markets and its strategy to diversify its capital and funding sources. SHB was able to achieve competitive terms for its issuance, with final pricing settling at the lower end of guidance.
SHB's management has earmarked the sukuk funds for further developing its Islamic business, prudently managing its assets-liabilities mix and maintaining a sufficient capital buffer. HSBC Saudi Arabia Ltd. And Saudi Hollandi Capital acted as the joint lead manager and bookrunner on this landmark transaction.
Mubarak bin Abdallah Al-Khafra, chairman of the board of directors at SHB, said: "The recent issuance underscores the fundamental strength of the bank to be able to access the sukuk market at regular intervals; it also highlights the continued confidence of investors in the oldest banking franchise in Saudi Arabia. We would like to take this opportunity to thank the investor community for their participation in the issuance and contribution to the development of the sukuk financing market in the Kingdom."
Walid Khoury, CEO of HSBC Saudi Arabia, and Khalid Nasser Al-Muammar, CEO of Saudi Hollandi Capital, in a joint statement said: "We congratulate the Saudi Hollandi Bank on a very successful and well-timed subordinated sukuk issuance, which was only the second Tier 2 Capital issuance in Saudi Arabia under the newly enacted BCBS Basel III transitional guidelines.
(Menafn.Com / 27 Nov 2012)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com
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