Saudi real estate developer Dar Al Arkan has issued a $450m sukuk, or Islamic bond, priced at 11 percent, a banking source said on Thursday, making it the first issue from the region this year.
"The magic number is $450 million," the source said.
The developer had been expected by bankers to raise around $500-700 million.
The source said the issue had attracted an order book "well north of $500 million" but the pricing had been more important to the issuer than the amount it could attract at 11 percent.
Unicorn Investment Bank, Deutsche Bank and Goldman Sachs were arrangers for the issue.
The bond from the kingdom's largest developer by market value is the first international issue from the Gulf Arab region in 2010 -- and also a first since conglomerate Dubai World rocked global markets on Nov. 25 with plans to request a delay on repaying $26 billion in debt.
There had been speculation the sale could be delayed due to the market turbulence caused by Greece's fiscal woes that have hit emerging markets.
Market and industry Sources told Reuters earlier on Thursday that Bahrain's United Gulf Bank had decided not to come to the market with a conventional bond after holding a series of investor meetings.
It is also the first 144a bond issued by a Saudi firm.
There has been an increase in Gulf Arab corporate and quasi-sovereign issuers opting for 144a types of issues, which are regulated under the U.S. securities commission allowing U.S. investors to buy into the issue. (Reuters)
"It was a good mix of regions," the banking source said when asked where investor demand came from.
($1=3.750 Saudi Arabian riyals) (Reuters)