Al Rajhi Cement issues $119m Islamic bond
Amman, April 25, 2011
Dubai-based Al-Rajhi Cement Holding said the company has issued JD85 million ($119 million) Islamic bonds for its unit in Jordan which are being managed and arranged by Capital Investments.
A premier investment bank based in Jordan, Capital Investments, said the seven-year sukuk was subscribed for by a number of leading Islamic and commercial banks.
These include Capital Bank, Cairo Amman Bank, Islamic International Arab Bank, Union Bank, Jordan Kuwait Bank, Bank of Jordan, and Arab Islamic Bank, said a company statement.
Al-Rajhi Cement – Jordan was established as a private shareholding company in 2006 and is wholly owned by Al-Rajhi Cement Holding, which is registered in the Dubai International Financial Centre.
Capital Investments announced the key transaction at a ceremony which was attended by Al-Rajhi Cement – Jordan chairman Omar Bin Sulaiman Al-Rajhi and Central Bank of Jordan Governor Faris Sharaf, alongside executives of the participating banks.
Cairo Amman Bank chairman Khaled Al-Masri, Arab Bank chief executive officer Nemeh Sabbagh, representing Islamic International Arab Bank, Union Bank general manager Nadia Al Saeed, Arab Islamic Bank general manager Atiyeh Shananier, Jordan Kuwait Bank deputy general manager Tawfiq Mukahal, and Bank of Jordan deputy general manager Mohammad Hamdan, together with chairman of Capital Bank and Capital Investments Basem Khalil Al Salem attended.
On the significance of the transaction, Al Salem said, "Jordan’s resilient economy is built on solid foundations that enable it to flexibly accommodate regional economic and political fluctuations."
He also lauded the progressive pro-investment policies adopted by the country, and underscored the role of the participating institutions as major market players contributing to the sustainable growth in the national economy.
Al Salem thanked both the Government and the Central Bank of Jordan for their invaluable support and dedicated efforts in opening the Jordanian capital market to new investment instruments and Islamic finance transactions in particular, creating new means of capitalizing on lucrative investment opportunities in the Kingdom.
Al-Rajhi praised Jordan’s Government and national institutions for their efforts in creating a positive investment environment and supporting the implementation of economically viable investments in the Kingdom.
He also thanked them for their support for the issuance of the first Sukuk in Jordan, thus enabling the company to adhere to its commitment to aligning its financing activities with Islamic Shari’a law.
The Sukuk were structured based on the Ijara (leasing) principle, through which the benefit in the underlying leased assets is represented by the issued Sukuk. Al-Tamimi & Company Advocates and Legal Consultants were the legal counsel for the transaction.
On the sukuk success, Capital Investments CEO Omar Al Wir said, “We hope that this alliance will pave the way for future successful Islamic finance transactions in the Kingdom.”
Al Wir also commended the General Ifta' department’s efforts in facilitating the Shari’a-compliant structuring of the Sukuk and its contribution to the successful closing of this landmark transaction.
"We appreciate Al-Rajhi Cement – Jordan’s confidence in Capital Investments, and are proud to have been appointed as the lead manager for this issuance,” said Al Wir.
“This achievement is a valuable addition to our track record in the Jordanian market, and we trust that our collaboration with Al-Rajhi will continue to support their ambitious expansion and investment plans in Jordan,” he added.-TradeArabia News Service