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Saudi’s Al Rajhi Bank plans dollar sustainable sukuk

Abu Dhabi wealth fund Mubadala has $276bn in assets under management Reuters/Dado Ruvic
Abu Dhabi wealth fund Mubadala has $276bn in assets under management

Al Rajhi Bank is planning to issue US dollar-denominated sustainable Islamic bond, as part of its international sukuk programme launched last year.

Al Rajhi Capital, Citigroup Global Markets Limited, Emirates NBD, Goldman Sachs, HSBC, JPMorgan, KFH Capital and Standard Chartered are joint lead managers and bookrunners for the sukuk issuance, the Saudi-listed bank said in a statement.

The offer amount and terms will be determined depending on the market conditions, the bank said.

Reuters reported, citing a bank presentation, that the issuance will be of benchmark size, which typically means at least $500 million.

The sukuk will finance or refinance sustainable projects eligible under the bank’s sustainable finance framework.

In November 2022, Al Rajhi Bank completed the issuance of 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.

The issuance was more than six times oversubscribed – with books exceeding $33 billion – and will be used to finance or refinance eligible green projects in accordance with PIF’s Green Finance Framework.

S&P ratings agency said recently that the Middle East will continue to see “a strong pipeline” of green, social, sustainable, and sustainability-linked bond (GSSSB) issuance in 2023.

Dennis Sugrue, senior director at S&P Global Ratings, added that in 2023 “global GSSSB issuance will return to growth, reaching $900 billion to $1 trillion, nearing the record $1.06 trillion in 2021″.

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