Bank Aljazira prices SAR 2 bln sukuk: report

Saudi Arabia’s Bank Aljazira has priced a SAR 2 billion sukuk issue that will boost its supplementary Tier 2 capital level, Reuters reported, citing an unnamed person familiar with the matter.

The lender set the transaction price at 190 basis points over the six-month Saudi interbank offered rate (SAIBOR). The bond issue is structured with a 10-year lifespan with the option for the lender to redeem the sukuk after five years, it added.

Saudi banks have been issuing sukuk in the past two years to boost their reserves, following a period of strong loan growth.

Bank Aljazira's total capital adequacy ratio (CAR), a key indicator of financial health, is one of the lowest among Saudi lenders but remains high compared with Western banks. Its CAR was 15.08 percent at the end of March, against a regulatory minimum of 8 percent, according to Reuters.