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Saudi Hollandi Bank Closes Sukuk

(Our Correspondent) / 4 January 2010

JEDDAH - Saudi Hollandi Bank, or SHB, has successfully closed its first public listed Sukuk of SR725 million.

This issue follows the private placement completed at the end of 2008, further cementing SHB’s position as the only bank in the Middle East to raise Tier-II capital using a Shariah-compliant structure. Riyad Capital and Saudi Hollandi Capital acted as joint lead managers and bookrunners for this transaction. A large number of investors expressed interest in the SHB Sukuk with total orders in the range of SR3 billion.

The structure of this Sukuk involves Mudaraba over the Islamic banking business of SHB. The Sukuk is a floating rate note for 10 years, with an option to call the issue after five years. The investors will receive a return of SIBOR plus 1.90 per cent per annum to be distributed bi-annually. The pricing was finalised below the original price indication again demonstrating the success of the transaction.

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