Saturday 20 July 2024

SEC launches two-part $1.75bn Islamic bond

Dubai, March 27, 2012

Saudi Electricity Company launched a $1.75 billion two-part Islamic bond on Tuesday, with tighter pricing on both the five-and 10-year tranches.

The $500 million five-year portion was launched at a spread of 140 basis points (bps) over midswaps, from 160 bps over midswaps indicated earlier.

The $1.25 billion 10-year tranche launched at 195 bps over midswaps, tightening from around 210 bps earlier.

Demand for the bond was seen being very strong, given the rarity value of a dollar sukuk from a majority government-owned Saudi corporate.

The company's big investment needs over a long-term period allowed it to add a rare 10-year portion to its sukuk, which would appeal to global investors.

The company, rated AA- by Standard and Poor's, can be seen benefiting from a high probability of state support, as Saudi Arabia's national electricity provider.

Investors will be further reassured by the inclusion of a change of control put clause if government ownership or control falls below 50 percent. HSBC and Deutsche Bank were the mandated lead arrangers on the deal, which was expected to price on Tuesday. - Reuters

Tags: sukuk | Islamic bond | bond | SEC | Saudi Electricity |

More Energy, Oil & Gas Stories

calendarCalendar of Events