Saudi Arabia’s Al-Jadaan & Partners joined Clifford Chance’s Dubai office in advising the Saudi Arabian General Authority of Civil Aviation (GACA) on its debut 15 billion riyals ($4 billion) ten-year Islamic bond, which is fully guaranteed by the Saudi Ministry of Finance.

The deal was led by Al-Jadaan & Partners’ managing partner Mohammed Al-Jadaan, and Clifford Chance partner Matthew Cahill, who is based out of Dubai. HSBC Saudi Arabia was the sole lead manager on the transaction, and was represented by the Abdulaziz AlGasim Law Firm in association with Allen & Overy.

It is the first Islamic bond, or sukuk, issued by a government entity in the kingdom, and is one in a series of sukuk from the Ministry of Finance to help fund the 27.1 billion riyals ($7.23 billion) development of the King Abdulaziz International Airport in Jeddah. The sukuk is a hybrid structure using investment and murabaha, a cost-plus-profit arrangement in compliance with Islamic law. The sukuk offers a 2.5 percent profit rate.

Saudi Arabia is currently implementing multibillion dollar infrastructure projects, and revamping many of its airports to cater to the growing number of passengers. Traffic at Saudi airports has reached 30 million passengers annually, and is expected to double to 60 million over the next 10 years, according to past figures from GACA.

GACA plans to issue its second sukuk at the end of the year to help fund the international airport in Jeddah, its top executive, Prince Fahd bin Abdullah, told Al Arabiya on Sunday. ALB

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