Banque Saudi Fransi successfully issued a $900 million sukuk in US dollars.
Banque Saudi Fransi, one of Saudi Arabia’s leading banks, has announced the successful completion of its dollar-denominated sukuk issuance, valued at $900 million. The bank revealed in a bourse filing that the sukuk, under the Trust Certificates Issuance Program, carries an annual return of 4.75 percent.
The sukuk issuance, with a five-year tenure, was executed through a special-purpose entity and targeted qualified investors both domestically and internationally. Banque Saudi Fransi appointed seven prominent local and international banks to manage the issuance process of the dollar-denominated sukuk.
The specifics regarding the value and terms of the certificates will be determined at a later stage, with the funds raised earmarked for Islamic financial activities. The bank aims to utilize the proceeds to further strengthen its Islamic banking offerings and support its strategic initiatives.
Citigroup Global Markets Ltd., First Abu Dhabi Bank PJSC, Goldman Sachs International, HSBC Bank, Mizuho International, and Saudi Fransi Capital have been appointed as joint lead managers for the sukuk issuance. Their expertise and extensive market knowledge will contribute to the success of the transaction.
To enhance the liquidity and tradability of the sukuk, Banque Saudi Fransi plans to list the certificates on the International Securities Market of the London Stock Exchange. The issuance will comply with Regulation S of the US Securities Act of 1933, allowing for its sale to international investors.
The announcement comes on the heels of Banque Saudi Fransi’s impressive financial performance in the first quarter of 2023. The bank reported a notable 23 percent rise in net profit, reaching SAR 1.07 billion, compared to SAR 875 million in the corresponding period last year. This robust performance reflects the bank’s ability to navigate challenging market conditions and capitalize on strategic opportunities.
Banque Saudi Fransi continues to demonstrate its commitment to innovation and growth, leveraging its strong position in the Saudi banking sector. By successfully completing the sukuk issuance, the bank strengthens its capital base and diversifies its funding sources, enabling it to expand its services and support the evolving needs of its customers.
The issuance of the dollar-denominated sukuk aligns with Banque Saudi Fransi’s strategy to deepen its presence in the Islamic finance market. As the demand for Sharia-compliant financial instruments grows, the bank aims to cater to the evolving preferences of its customers and seize opportunities in the sector.
The successful completion of the sukuk issuance further solidifies Banque Saudi Fransi’s reputation as a reliable and innovative financial institution in the region. It reflects the bank’s commitment to providing comprehensive financial solutions that align with the principles of Islamic finance and contribute to the sustainable growth of the Saudi economy.
This significant sukuk issuance, spanning a five-year period, was executed through a special-purpose entity, ensuring adherence to regulatory guidelines. Banque Saudi Fransi extended the offer to both qualified Saudi and international investors, aiming to attract a diverse range of participants. The bank appointed seven reputable local and international banks to manage the issuance process, ensuring a smooth and efficient execution.
The precise details concerning the value and terms of the sukuk certificates will be finalized at a later stage. The funds raised through this issuance will be utilized to support Islamic financial businesses, enabling Banque Saudi Fransi to further strengthen its position in the growing Islamic banking sector. The bank is committed to delivering comprehensive and innovative financial solutions in line with the principles of Sharia.
As Banque Saudi Fransi moves forward, it remains focused on driving value for its stakeholders and delivering exceptional services to its customers. The successful sukuk issuance marks a significant milestone for the bank, reinforcing its position as a key player in the Islamic finance sector and underlining its commitment to fostering economic development in Saudi Arabia and beyond.
