Saudi Arabia adopts hybrid structure for debut dollar sukuk

Saudi Arabia has chosen a hybrid structure for its debut international sukuk, a format widely used in the Saudi local debt market, but not the most popular for sovereign issues, Reuters reported citing the offer prospectus.

An amount equal to 51 percent of the bond proceeds will be used in a mudaraba agreement, while the remaining 49 percent will be utilized in a murabaha facility by the trustee, a Cayman Islands-incorporated company called KSA Sukuk Limited, to purchase sharia-compliant commodities.

The Islamic bond, expected at $10 billion, will be the country's second international debt sale after a $17.5 billion conventional bond in October last year.