Three Saudi-listed companies appoint banks for sukuk offers

Two banks and one telecom operator listed on the Saudi stock exchange have appointed regional and global banks to raise new funds through sukuk offerings.

Saudi Telecom Company (STC) has appointed 11 banks for a fresh sukuk issue under its $5 billion loan programme, it said in a statement to the bourse on Tuesday.

The joint lead managers are BNP Paribas, Citibank, Dubai Islamic Bank, Emirates NBD, HSBC, the Islamic Corporation for the Development of the Private Sector, Kuwait Finance House, Mashreq Bank, National Bank of Greece, SNB Capital and Standard Chartered.

The sukuk may be released in one or more tranches or through a series of issuances to qualified investors inside and outside the kingdom.

The proceeds will be used for general corporate purposes, the statement said.

In another bourse filing, Riyad Bank announced the appointment of banks for its upcoming dollar-denominated, tier 2 capital sustainable notes.

Named as joint lead managers are First Abu Dhabi Bank, Banco Bilbao Vizcaya Argentaria, DBS Bank, Emirates NBD Capital, HSBC, Merrill Lynch Saudi Arabia, Mizuho International, Riyad Capital, SMBC Bank and Standard Chartered.

The proceeds will be used for general banking purposes, it said.

Finally, Al Rajhi Bank appointed banks for its dollar-denominated, social additional tier 1 (AT1) capital sukuk.

It named as joint lead managers and bookrunners Al Rajhi Capital, Goldman Sachs International, HSBC, Morgan Stanley, Standard Chartered Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, Mashreq, Nomura and Rabeh. Aven Bank is co-manager.

The issuance aims to strengthen the lender’s capital and support general banking, Al Rajhi said.

• Saudi Arabia takes control of Binladin Group
• Riyadh’s new bond issue attracts $31bn in orders
• Saudi non-oil private-sector growth eases in December

The companies did not disclose the amount to be raised, adding that the size and terms of the sukuk issuance would be determined based on market conditions.

Sukuk are Islamic bonds that were developed as an alternative to conventional bonds that are not considered permissible by many Muslims as they pay interest and may finance businesses involved in activities not allowed under sharia law.