State-controlled Saudi Electricity Company (SEC) 5110.SE, the kingdom’s electric transmission monopoly, began marketing U.S. dollar-denominated dual-tranche green sukuk, or Islamic bonds, a document showed on Thursday.
It gave initial price guidance of around 170 basis points (bps) over midswaps for a tranche of five-year sukuk and around 200 bps over midswaps for a 10-year sukuk tranche, according to the document from one of the banks arranging the deal, which is expected to close later on Thursday.
The proceeds from the region’s first public sale of green bonds this year will be used to finance environmentally friendly projects.
The deal comes amid a flurry of debt sales that followed the summer lull, as governments and corporates in the Gulf seek to plug finances that have been hit by the double blow of the coronavirus pandemic and lower oil prices.
The hydrocarbon-dependent region’s issuers have been increasingly tapping debt investors over the past several years to raise cash in an era of low interest rates globally and weak oil prices. Each tranche of the sukuk sale will be of benchmark size, which generally means at least $500 million.
First Abu Dhabi Bank FAB.AD, HSBC HSBA.L, JPMorgan JPM.N, MUFG 8306.T and Standard Chartered STAN.L are arranging the deal.
Last month, SEC – the main electricity producer in Saudi Arabia with 81.1% indirect government ownership – said it had signed a 9 billion riyal ($2.4 billion) syndicated Islamic loan with local banks.
Source Nasdaq