Al Rajhi Bank settles SAR 10 bln Tier 1 Sukuk, allocates 100% to retail investors

Al Rajhi Bank tower

Al Rajhi Bank successfully completed and settled a Tier 1 Sukuk issuance. The number of subscribers exceeded 125,000, Al Rajhi Capital, the financial advisor, bookrunner and lead manager on the offering, announced.

Applications were fully allocated to retail subscribers. Surplus refunds for institutional investors started on Nov. 16. The Sukuk will begin trading on the Saudi Exchange (Tadawul) after being credited to investment portfolios and when the necessary regulatory procedures are fulfilled.

Al Rajhi Capital added that the Tier 1 SAR-denominated Sukuk is the first of its kind by a financial institution in Saudi Arabia, issued to retail, institutional and corporate investors. It was offered to the public at a quarterly-payable annual return of 5.50%. The return was calculated from the settlement date (Nov. 16, 2022).

Waleed AlRashed, CEO of Al Rajhi Capital, expressed delight at the bank’s confidence and its contribution to the diversification of investment products. He stressed the leading role played in developing the debt instruments and sukuk market and diversifying its investor base for being one of the key goals of the Financial Sector Development Program (FSDP). AlRashed also thanked the Capital Market Authority (CMA) and Tadawul.

The Tier 1 Sukuk is Shariah-compliant, with no maturity date (perpetual), and callable in five years by the bank. The purpose of the Sukuk issuance is to improve the bank’s ability to expand its business. Moreover, Sukuk is one of the main investment instruments for generating consistent income on a regular basis for investors.

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