Premium food group Almarai has issued the first-ever Saudi riyal corporate perpetual sukuk. The issuance, which raised SAR 1.7bn ($453.2m), was also the first corporate hybrid in the Gulf Cooperation Council.
BNP Paribas Investment Company KSA, HSBC Saudi Arabia, Saudi Fransi Capital and Standard Chartered Capital Saudi Arabia were joint lead managers and bookrunners for the hybrid sukuk issuance. Almarai was also advised by international law firm Baker & McKenzie.
Detailed structuring and documentation of the sukuk began in July and it was completed within a relatively short timeframe. Meanwhile, Almarai obtained 100% equity accounting treatment for the transaction, which required careful consideration during the initial structuring phase.
Solid investor demand meant that Almarai could issue at the upper end of its targeted issue size of SAR 1.7bn. Interest came from a range of government entities, bank treasuries and asset managers, with additional allocations made to private wealth managers and insurance-related investors.
The transaction, which took place at the end of September, enables Almarai to further diversify its funding sources as it looks to finance its expansion plans cost-effectively.
Sally Percy is editor of The Treasurer