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Saudi’s Al Rajhi Bank to raise $1bn via sustainable sukuk

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The Saudi-listed lender's US dollar-denominated sustainable sukuk issuance is expected to close on Thursday

Saudi Arabia’s Al Rajhi Bank is set to raise $1 billion with five-year sustainable Islamic bonds, according to a media report.

The spread on the sukuk was set at 110 basis points (bps) over US Treasuries (UST), tightened from initial price guidance of around 150 bps over UST after demand topped $3.75 billion, Reuters reported, citing a document from one of the banks arranging the deal.

Al Rajhi Capital, Citi, Emirates NBD Capital, Goldman Sachs, HSBC, JPMorgan, KFH Capital and Standard Chartered are joint lead managers and bookrunners for the debt sale.

The Saudi-listed lender launched a US dollar-denominated sustainable sukuk as part of its international sukuk plan on Wednesday, which will likely close today (Thursday).

In a statement published on the Saudi Exchange (Tadawul), the bank said that the amount and terms of the issuance will be determined depending on the market conditions, with the offer open for Saudi and global investors.

In November 2022, Al Rajhi Bank completed the issuance of a SAR 10 billion ($2.6 billion) Tier 1 SAR-denominated sukuk.

In February, the Saudi sovereign Public Investment Fund (PIF) raised $5.5 billion through its latest green bond issuance, supporting expectations of a strong year for sustainable bonds in the Middle East.