International law firms Baker & McKenzie and Maples and Calder have advised the Banque Saudi Fransi on establishing a $2 billion Islamic bond, or sukuk, programme according to a regulatory filing on the London Stock Exchange.
Citigroup, Credit Agricole, Deutsche Bank and Saudi Fransi Capital acted as lead arrangers and dealers of the programme, as shown by the April 17 prospectus of the programme. The prospectus, however, did not specify what the proceeds from thesukuk issuances under the programme would be used for.
The Baker & McKenzie team was led by partners Karim Nassar in Riyadh, Bilal Kahlon in Bahrain, and Simon Porter in London. The Maples and Calder team, meanwhile, was led by Dubai office managing partner Tahir Jawed and associate Manuela Belmontes.
“On the conventional debt capital market side, we had worked with Banque Saudi Fransi in 2009 in establishing their EMTN programme. Now with this sukuk programme, the bank is ready to tap either the conventional or Islamic debt capital market whenever they choose. It is a great way to diversify their liquidity needs," said Baker & McKenzie’s Kahlon.
Traditionally, the Saudi sukuk market has been largely relegated to domestic riyal-denominated issuance. But there has been a shift in recent days with major dollar-denominated sukuk offerings out of the kingdom attracting great demand. In March this year, the Saudi Electricity Company reportedly received orders in excess of $15 billion for a $1.75 billion sukuk issue.
Earlier this year, Saudi Arabia's General Authority for Civil Aviation (GACA) issued a mammoth 10-year $4 billion sukuk that was fully guaranteed by the Saudi Ministry of Finance. The company said it plans to issue its second sukuk at the end of the year to help fund the King Abdulaziz International Airport in Jeddah. ALB
Shaheen Pasha is Middle East Regional Editor at ALB. Follow her on Twitter: @ALB_TheBrief.
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