Pricing of Saudi Electricity's new sukuk soars

Rise far exceeds 45bps over Saudi Interbank Rate seen with maiden issue back in February.
Pricing of Saudi Electricity's new sukuk soars
By Souhail Karam
Sun 28 Jun 2009 09:11 PM

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.

For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.