Saudi’s Almarai Stirs Gulf Debt Market with $750M Sukuk Sale

DUBAI—Saudi Arabia’s leading food and beverage enterprise, Almarai, has unveiled plans to secure $750 million through the issuance of 10-year Islamic bonds, or sukuk, eliciting over $4 billion in orders, according to fixed income news service IFR’s Tuesday report.

The sukuk launched with a yield of 145 basis points over U.S. Treasuries, a notable tightening from the initial pricing guidance of approximately 180 basis points over the same benchmark, as evidenced by a bank document released earlier that day.

Renowned banking institutions HSBC and Standard Chartered were appointed as the global coordinators for this financial endeavor. They are further reinforced by Citi, Dubai Islamic Bank, and JPMorgan, all of whom have been assigned as joint lead managers and bookrunners, as revealed in an investor presentation viewed by Reuters.

This lucrative initiative by Almarai marks a resumption of debt sales in the region after a hiatus of roughly a month. The path was paved by Dubai real estate firm Sobha Realty, which kicked off with a $300 million sukuk offering.

Hot on the heels of Sobha Realty, two banking titans from Abu Dhabi followed suit, amassing a combined total of $1.25 billion through the sale of both conventional and Islamic bonds. Concurrently, Abu Dhabi’s renewable energy corporation, Masdar, capitalized on the reviving market, raising $750 million through green bonds.

Meanwhile, Saudi Arabian real estate developer Dar Al Arkan also sought to seize the opportunity, targeting $600 million from the sukuk issuance. This flurry of activity underlines the robust appetite for bonds and sukuks in the region, heralding a promising period for debt sales following a brief slowdown