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Saudi Hollandi Bank
today announced the
successful closing of
its first public, listed
Sukuk of SAR 725
million. This issue
follows the private
placement completed at
the end of 2008, further
cementing SHB’s position
as the only bank in the
the Middle East to raise
Tier-II capital using a
Shariah-compliant
structure. Riyad Capital
and Saudi Hollandi
Capital acted as Joint
Lead Managers and
Bookrunners for this
transaction.
A large number of
investors expressed
interest in the SHB
Sukuk with total orders
in the range of SAR 3
billion. The structure
of this Sukuk involves
Mudaraba over the
Islamic banking business
of SHB. The Sukuk is a
Floating Rate Note (FRN)
for ten years, with an
option to call the issue
after five years. The
investors will receive a
return of SIBOR plus
1.90% per annum to be
distributed bi-annually.
The pricing was
finalised below the
original price
indication again
demonstrating the
success of the
transaction.
SHB’s Chairman, Engr.
Mubarak Al-Khafrah,
commented that the
successful completion of
the second Sukuk issue
will grow SHB’s capital
and help it to achieve
its strategic plans. The
substantial demand for
the Sukuk, leading to an
oversubscription of more
than four times, is
further proof of the
dynamism and resilience
of the Saudi Arabian
economy and financial
markets, he added. Engr.
Al-Khafrah also thanked
SHB’s Shariah Committee
for their guidance and
support in the Sukuk
transaction.
Dr. Bernd van Linder,
Managing Director of
Saudi Hollandi Bank,
expressed his delight
with the successful
completion of the
transaction and thanked
investors for their
contribution to the
success of the issue.
Among the investors
participating were
Government Institutions,
insurance companies,
investment and money
market funds and
financial institutions.
He also thanked Riyad
Capital and Saudi
Hollandi Capital for
their diligent efforts
in managing the
transaction. Dr van
Linder added that that
the success of the Sukuk
issue would support the
further development of
the Saudi Riyal debt
capital markets.
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