Sabic could be planning to raise up to $5 billion through a programme of Islamic bonds, an official of the Saudi-based Islamic Development Bank said.

The world's largest chemical firm by market value, Saudi Basic Industries Corp wants to use the money to pay for expansion, Islamic Development Bank treasurer Mohammad Tariq said.

Sabic chief financial officer Mutlaq Al Morished declined to comment when contacted by Reuters.

Asharq Al Awsat newspaper quoted Morished as saying Sabic was waiting for approval from the regulator to sell $1.3 billion of Islamic bonds.

Tariq has advised Sabic in the past on Islamic finance and discussed the new programme of Islamic bonds or sukuk with the company as recently as three weeks ago, he said, adding the plans could have now changed.

'It's a programme of sukuk up to $5 billion, which would be sold in tranches. I doubt it would be one big issue, Tariq said adding that Sabic had been aware that a flood of supply was widening yields, making it more expensive to borrow.

'But when I spoke to them last they were quite keen to bring it forward and do it quickly, because they were also aware that there may be more issuance taking place,' he said.

The Islamic Development Bank is a multilateral institution created to providing financial and technical assistance to Muslims that complies with sharia, or Islamic law.

HSBC had been mandated to lead the sale, which was likely to consist of bonds denominated in US dollars and Saudi riyals, Tariq said.

HSBC officials in Dubai did not return calls for comment.

HSBC officers in Saudi Arabia were closed on Thursday for the weekend.

Sabic bought General Electric's plastics business in May for $11.6 billion and said it would borrow around 75 percent of the cost.

The largest single sukuk sale raised $3.52 billion for Dubai developer Nakheel Group in December. Reuters