Maalem Financing’s first sukuk sale raises SAR 100 mln

Saudi-based Maalem Financing has raised SAR 100 million from its first sukuk sale, aiming to develop a crowd-funding product and to expand its operations, Reuters reported, citing John Sandwick, Maalem’s board member.

The sukuk issuance is an unprecedented in a market mainly dominated by Islamic banks and sovereign institutions.

The three-year unsubordinated deal was sold through a private placement. The sharia-compliant commercial and consumer financing firm could tap the market again as early as January 2019, he said.

“The program is for SAR 500 million and with 3.6 times oversubscription, there seems to be a lot of demand,” he was quoted as saying.

Additional sales of sukuk aimed to raise between SAR 100 million and SAR 200 million, depending on market conditions, he said, adding that Maalem may consider a dollar-denominated sukuk issuance at a later stage.

While this was a Murabaha transaction, the company hopes to use an asset-backed structure for future deals, Sandwick said.

The company plans to open several regional offices by the end 2018 and is awaiting regulatory approval for a crowd-funding license, Sandwick said.

Albilad Capital was hired as lead manager and arranger of the sukuk.

Maalem Financing was established in 2009. It received regulatory approval to operate as a non-real estate finance company in 2016, and it increased its capital in 2017 to SAR 150 million.