Pricing of Saudi Electricity's new sukuk soars

SAUDI ELECTRICITY: Sukuk pricing soars but still good pricing, says top official.(Getty Images)

The pricing of a 5 billion riyals ($1.33 billion) Islamic bond issue by Saudi Electricity was 160 basis points over the Saudi Interbank Lending Rate, the firm's top executive said on Sunday.

Ali Saleh al-Barrak told Reuters the five-year sukuk was oversubscribed "at least once" but did not say how much the company would end up taking.

Bankers said the firm would take 7 billion riyals. Barrak declined to comment on this figure. "It has not been decided yet," he said.

The pricing of the sukuk marks a sharp rise compared to Electricity's maiden issue (back in 2007) of 5 billion riyals which was priced at 45 bps above the Saudi Interbank Rate.

"The conditions prevailing in the global credit markets are the cause for this rise but it is still a good pricing," he said.

He cited as an example a recent sukuk issue by a utility firm in Dubai which he said was priced at above 300 bps.

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