9.39 PM Sunday, 25 February 2024
  • City Fajr Shuruq Duhr Asr Magrib Isha
  • Dubai 05:28 06:42 12:35 15:52 18:22 19:36
25 February 2024

Saudi Dar Al Arkan to issue $500m-$700m sukuk

Aerial view of Riyadh. The sukuk by the kingdom's largest developer could be priced to yield between 10.5-11 per cent. (AFP)

By Reuters

Saudi Arabia's Dar Al Arkan Real Estate will likely issue a five-year fixed rate Islamic bond worth between $500m-$750 million by the end of the week, two bankers with knowledge of the deal said yesterday.

The Islamic bond, or sukuk, could be priced to yield between 10.5-11 per cent, they said.

The bond for the kingdom's largest developer by market value could be the first international issue from the Gulf Arab region since November. "They have been struggling," one banker said referring to the interest in the sukuk.

"They still haven't closed anything and they have been on the road for a long time now. And 10.5 per cent is not something that would make me excited. Mid-teens would have been good."

The roadshow has been held in the Middle East, Europe, Asia and the United States. The new bond will likely be used to refinance a $600m sukuk due in mid-February.

The bonds proceeds will help finance SR2.7 billion (Dh2.64bn) of capital expenditure during 2010, a prospectus for investors showed.

Deutsche Bank, Goldman Sachs and Unicorn Investment Bank are arranging the sale.

The issue has been given a provisional rating of Ba2 and BB- by Moody's and Standard & Poor's respectively. Executives at Dar were not immediately available for comment.


Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.