SNB taps debt market for the second time this year: The Saudi National Bank (SNB) raised USD 1.25 bn from the sale of 6.2k tier 2 capital notes with a 6% annual yield, it said in a disclosure to Tadawul. The 10-year offering was priced at 200 bps over US Treasuries.

Orders reportedly exceeded USD 4 bn, marking the lender’s biggest-ever USD-denominated bond sale, according to data compiled by Bloomberg.

ICYMI- The Reg S compliant issuance falls under SNB’s euronotes medium-term program, and is set to be listed on the London Stock Exchange, with proceeds earmarked for boosting tier 2 capital, corporate funding, and broader strategic objectives. The move comes one week after SNB closed a SAR 1.73 bn additional tier 1 (AT1) debt issuance.

IN CONTEXT- Saudi banks are ramping up junior debt sales to bankroll Vision 2030: Local lenders are increasingly issuing bonds to unlock lending capacity and ease pressure on public finances while moving forward with gigaprojects. Banks are also exploring securitization as an alternative tool, with the first major sale expected this year, Bloomberg reports.

Also in the pipeline: Bank Albilad is currently planning a USD-denominated AT1 sukuk under its USD 2 bn program. Meanwhile, Cenomi Centers is gearing up to issue up to SAR 3.75 bn in sukuk.

ADVISORS: Abu Dhabi Commercial Bank, DBS Bank, Emirates NBD, Goldman Sachs, HSBC, JP Morgan Securities, Mashreq Bank, Mizuho International, SNB Capital, SMBC Nikko Capital Markets, and Standard Chartered were joint lead managers and joint bookrunners for the offering.

ALSO- SNB will fully redeem SAR 4.2 bn in AT1 capital sukuk at face value by the end of the month, according to a separate filing. The sukuk were issued in 2020 as part of SNB’s capital optimization scheme and will be repaid in full, alongside any accrued returns. The sukuk will be delisted following redemption, ending all outstanding issuances under this program.

What we know: The shariah-compliant bond had an original tenor with no fixed maturity, but included a first call date five years post-issuance — a common feature in AT1 capital instruments. Early redemption often signals that a bank is in good financial health.

ADVISORS- SNB Capital is acting as payment administrator and sukukholders’ agent.

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