Saudi Arabia targets raising $2 bln with new sukuk issuance

Saudi Arabia has started marketing US dollar-denominated sukuk, for an issuance expected to be around $2 billion in size, Reuters reported on Wednesday, citing a document.

This would be the Kingdom’s second international sukuk sale, after a $9 billion issuance in 2018. It will complete Saudi Arabia’s external funding requirements for 2018.

The Saudi government, acting through the finance ministry, has started marketing notes with an initial price guidance of around 145 basis points over mid-swaps.

The transaction is being coordinated by Citi, HSBC, and JPMorgan, who are serving as joint lead managers together with BNP Paribas, Mizuho and Samba Capital.

The structure of the sukuk is the same one adopted for last year’s issue, comprising a mudaraba agreement, a form of Islamic investment management partnership, plus a murabaha facility that would trade commodities with a special purpose vehicle.

The sukuk, due to settle on Sept. 19 and with a January 2029 maturity, are expected to price later on Wednesday, according to the document.