Riyad Bank issues SAR 4 bln sukuk

Riyad Bank, Saudi Arabia's fourth-largest lender by assets, has priced its SAR 4 billion sukuk at 115 basis points (bps) over the Saudi Interbank Offered Rate (SAIBOR), Reuters has reported, citing industry sources close to the matter.

The privately-placed sukuk, which has a tenor of 10 years, will reportedly boost the bank's Tier 2 capital.

Last month, Riyad Bank announced its plans for the issuance, following approval from its general assembly and the Saudi central bank.

Saudi British Bank (SABB) also recently said it had sold SAR 1.5 billion sukuk with the same tenor as Riyad Bank's issue with a profit rate of 130 bps over SAIBOR.

The move comes after the kingdom’s market regulator, the Capital Market Authority (CMA), said it would put together a five-year strategy this year that would encourage sukuk issuance as an alternative to bank loans.