Al Bayan becomes first non public company in Saudi Arabia to raise dollar Sukuk

Al Bayan becomes first non public company in Saudi Arabia to raise dollar Sukuk

SAUDI ARABIA: Saudi conglomerate Al Bayan Group Holding Company has raised funds through the Shariah compliant market in a pioneering Islamic deal marked as the first of its kind for a private Saudi corporate.

Securing US$50 million through a three-year Sukuk from three GCC banks, the deal positioned Al Bayan as the first private conglomerate in the Kingdom to close a US dollar Sukuk through a private placement. The firm is no stranger to the Islamic finance market: in 2013, the conglomerate created the first Malaysian ringgit Sukuk program by a Saudi corporate issuer – a RM1 billion (US$246.56 million) Sukuk Wakalah program established to fund the company’s expansion plans. The first tranche of the program for RM200 million (US$49.31 million) was the first by such an issuer in the Malaysian debt capital markets. The following year, the firm made its debut in the regional syndication debt market with a US$70 million syndicated Islamic term-financing facility with a consortium of regional and international banks.

“As advisors to Al Bayan, our strategy was to support the expansion of the company’s profile. We have done this through partnering with reputable international and regional banks, enabling Al Bayan to access sophisticated financial instruments and international financial markets which have helped them successfully maintain their ‘AA3’ credit rating from RAM Ratings Malaysia,” explained Dr Hasnita Hashim, CEO of Guidance Investments – the parent of Guidance Capital Markets (DIFC) which advised on and led Al Bayan’s dollar and ringgit Sukuk deals. “We have also found that GCC banks have an appetite for regional issuers, especially those with a sound business model and diversified revenue streams.” 

In its almost 40-year history, the Saudi conglomerate, which has businesses in media, general trading, civil aviation, health care and information technology among others, has progressively become more sophisticated in its fund-raising strategies moving from bilateral relationships with local and offshore banks to partnering with entities beyond its borders and tapping the liquidity of other markets. The most recent US dollar Islamic paper is described as a “natural step” in Al Bayan’s financial progression by Guidance.


May 13, 2016 / banking, investment, islamic finance / Tags: