Othaim Malls raises SAR 1 bln in debut sukuk issue: Report

Al Othaim Real Estate and Investment Co. (Othaim Malls) has raised SAR 1 billion through a debut sukuk issue which will be used to fund the company’s expansion plans, Reuters reported Sunday, citing unnamed banking sources.

The five-year sukuk was said to be priced at 170 basis points over the six-month Saudi interbank rate.

The company is building five malls and 16 entertainment centers that are set to be completed by next year.

Othaim Malls is part of al Othaim Holding, a Saudi-based family owned conglomerate which includes listed food firm Abdullah al Othaim Markets Co.

Earlier this month, Reuters reported that the shopping mall operator was marketing the sukuk after it had revived plans for the issue over the summer.

The transaction was arranged by the investment banking arms of Banque Saudi Fransi, Gulf International Bank and National Commercial Bank (NCB).

Several Saudi companies have issued riyal-denominated sukuk this year including, Binladen Group, Najran Cement Co, Bahri (The National Shipping Company of Saudi Arabia) and the Saudi British Bank (SABB).

Islamic finance deals, mainly from Saudi Arabia and the United Arab Emirates (UAE), were up 47 percent year-on-year during the H1-2015 and accounted for 13 percent of total new loans, according to a recent report by Fitch.