Dairy giant Almarai returned to global debt markets after a two-year hiatus with a USD 500 mn, five-year sukuk offering, according to a bourse disclosure. The issuance carries a 4.45% yield, 85 basis points spread over US Treasuries, narrowed from the initial price guidance of 120 bps above Treasuries, Zawya reports. The tightening came on the back of strong demand, which saw investors place orders worth USD 2.1 bn (excluding joint lead manager interest), according to the news outlet.

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What’s next: The Reg S-compliant sukuk carry semi-annual coupons and are scheduled to settle on Wednesday, 24 September. The notes will be listed on Euronext Dublin’s Global Exchange Market.

Background: Books opened earlier this week, with the issuance falling under Almarai’s updated USD 2 bn trust certificate program. The move comes a little over two years after Almarai last tapped the international debt market, when it raised USD 750 mn. The company is rated Baa3-positive by Moody’s and Baa-positive by S&P.

The move comes as Almarai bankrolls an acquisition spree: Just last month, the company closed a SAR 1 bn takeover of bottled water producer Pure Beverages Industry, after completing its SAR 182 mn purchase of cold-chain operator Etmam Logistics in May of last year. Almarai had also explored a USD 263 mn acquisition of Jordan’s Hammoudeh Food Industries, which ultimately fell through earlier this year.

ADVISORS- Our friends at HSBC alongside Citigroup, Dubai Islamic Bank, Emirates NBD Bank, JP Morgan, and Standard Chartered Bank are acting as joint leads.

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