Saudi construction giant completes $266m sukuk sale

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Saudi Binladin Group, one of the largest construction firms in the kingdom, has completed a SR1bn ($266.7m) Islamic bond sale, two bankers familiar with the matter said.

The transaction, structured as a sukuk al-murabaha, has a one-year lifespan and pays a profit rate of 2.5 percent, the sources said, speaking on condition of anonymity as they weren't authorised to talk to the press.

A murabaha is a sharia-compliant cost-plus-profit arrangement. Binladin Group was not immediately available for comment.

Sources said last month that BNP Paribas and the investment banking arm of Gulf International Bank were marketing a deal for Binladin Group to Saudi investors, with proceeds to be used to fund its projects.

The Islamic bond was sold to a wide range of investor types including financial institutions, asset managers and insurance funds among others, one of the bankers said.

The sukuk sale is the fourth carrying a 364-day tenor. The last, a SR1bn offering, was completed in August, with previous deals in July 2010 and July 2011.

Binladin Group has already completed one, longer-dated local currency sukuk in 2013. It priced the SR1.3bn Islamic bond with a 2.5-year lifespan, arranged by the investment banking arm of Banque Saudi Fransi, in April.

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