Three of the Kingdom’s largest listed institutions have set plans in motion to raise bns of USD-denominated debt. Al Rajhi Bank is preparing a perpetual AT1 social sukuk, while Riyad Bank is moving ahead with a Reg-S, 10-year Tier 2 sustainable note issuance, according to separate disclosures. Both offerings carry a par value of USD 200k, are callable after five years, and will be listed on the London Stock Exchange’s International Securities Market. Both offerings are also set to close today. Separately, stc launched a new USD 5 bn sukuk program.

Why it matters

For the banks this is a liquidity protection play: With gigaprojects entering peak construction phases this year, credit demand is expected to remain high. Issuing these notes allows the lenders to expand their loan books without stressing their capital adequacy ratios or driving up the SAIBOR. The ESG notes are expected to tighten pricing.

For stc, a program of this size suggests significant capex requirements for 5G infrastructure or a readiness for cross-border M&A activity in the corridor this year.

Our take

By tapping international markets at the start of the year, these heavyweights are bringing fresh hard currency into the Kingdom rather than competing for SAR liquidity domestically — which is already squeezed. Where these transactions price — specifically the spread over US Treasuries — will signal the cost of borrowing for regional issuers in 1Q.

Advisors

Riyad Bank’s advisors: The lender hired a syndicate of joint lead managers including First Abu Dhabi Bank, Banco Bilbao Vizcaya Argentaria, DBS Bank, Emirates NBD Capital, HSBC, Merrill Lynch Saudi Arabia, Mizuho International, Riyad Capital, SMBC Bank International, and Standard Chartered Bank.

Al Rajhi mandated a group of joint lead managers comprising Al Rajhi Capital, Goldman Sachs International, HSBC, Morgan Stanley, Standard Chartered Bank, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, Mashreq, Nomura, and Warba, with Affin Bank appointed as co-manager.

stc appointed a team of joint lead managers including BNP Paribas, Citibank, Dubai Islamic Bank, Emirates NBD Capital, HSBC, the Islamic Corporation for the Development of the Private Sector, Kuwait Finance House Capital, Mashreq Bank, National Bank of Greece, SNB Capital, and Standard Chartered Bank.

(** Tap or click the headline above to read this story with all of the links to our background and outside sources.)

Tags: