Saudi’s Almarai Prices Gulf’s First Corporate Hybrid Sukuk
BNP Paribas, HSBC, Saudi Fransi (Credit Agricole) and Standard Chartered were the leads.
Saudi Arabian dairy producer Almarai has completed the first hybrid bond offer by a corporation in the Gulf, selling a SAR1.7 billion ($453.2 million) Islamic bond (sukuk) on Monday, bankers said.
The issue is a perpetual sukuk, meaning it has no maturity date and in some ways resembles an equity instrument. The issuer can choose to redeem the sukuk after five years.
Since last year two banks in the Gulf have issued hybrid sukuk and one has issued a hybrid conventional bond; Almarai’s issue is the region’s first hybrid from an issuer other than a bank.
Almarai’s deal was priced at 200 basis points over the three-month London Interbank Offered Rate, in line with previously given guidance. If the sukuk is not redeemed, the profit rate steps up by 750 bps, according to a lead banker.
Information on allocations to various investor types and the reoffer price will be released later this week, in accordance with Saudi regulations. The cash reoffer price is likely to be at par, the lead said.
The company completed a two-week roadshow for investors on Sept. 19, and opened books for the sukuk on Sept. 22. BNP Paribas, HSBC, Saudi Fransi (Credit Agricole) and Standard Chartered were the leads.