Points of Essence:

• The Saudi Binladin Group’s debut Sukuk issuance into the Saudi debt capital markets was successful in raising more than SR1 billion to finance its construction of an iconic hotel project in Mecca. With HSBC Saudi Arabia being the sole lead manager and bookrunner for the issuance, the privately placed securities has a 5-year maturity with semi-annual profit payments.

RIYADH: The Saudi Binladin Group successfully completed the issuance of a privately placed Saudi riyal sukuk of finance raising more than SR1 billion from the capital markets in Saudi Arabia. The Sukuk has a 5-year maturity with semi-annual profit payments.

This is The Saudi Binladin Group’s debut Sukuk issuance into the Saudi debt capital markets. HSBC Saudi Arabia was the sole lead manager and bookrunner for the issuance.

This innovative issuance has to its credit several firsts including the first unrated sukuk of its size to be successfully distributed entirely within the Kingdom and the first issued through an offshore special purpose vehicle, which is registered, cleared and settled through Tadawul.

The Sukuk proceeds are to be used for the construction of an iconic hotel project that Saudi Binladin Group is developing in Makkah.

“One of the goals of The Saudi Bin Ladin Group is to support the capital markets of Saudi Arabia and develop the growth of Islamic financing in the industry. Additionally this inaugural issuance enables the group to establish a presence in the Saudi capital markets and substantially broadens the company’s investor base to include private investors and other entities,” Yahya Mohammed Binladin, vice chairman and CEO of the group, said.

“This issuance has seen strong interest from the sophisticated investor community in Saudi Arabia. This interest is reflective of the high esteem with which Saudi Binladin is regarded with in the Kingdom and also recognizes our credentials as a leader in the Sukuk and debt capital markets. HSBC’s Islamic brand, Amanah, is synonymous with leadership, innovation and professional delivery and this issuance confirms our position as the premier Islamic finance provider in the Kingdom and around the world,” Timothy Gray, CEO of HSBC Saudi Arabia said.

“We are always keen to lead the development of Islamic financing industry and Saudi capital markets innovative solutions such as this issuance. This transaction stresses our integrated Islamic and innovative financing solutions capabilities which HSBC will deliver in Saudi Arabia,” Fahad Al-Saif, associate director, Investment Banking Finance, said.

© Arab News 2008

Source: www.zawya.com