Saudi’s SAAD set to price Islamic bond: arranger

MANAMA - Saudi Arabia’s SAAD Group is set to price its five-year benchmark Islamic bond at 80 to 85 basis points above the London Interbank Offered Rate, a source at arranging bank BNP Paribas said on Tuesday.

By (Reuters)

Published: Tue 1 May 2007, 6:37 PM

Last updated: Sat 4 Apr 2015, 10:55 PM

“The initial guidance is 80 to 85 points over LIBOR,” the source said. “The final prices will be set tomorrow or Thursday.”

Benchmark size generally means at least $500 million.

Moody’s Investors Service, which assigned a Baa1 rating to the Islamic bond, or sukuk, said SAAD Group would lease land in Saudi Arabia to Golden Belt, a Bahrain-based special purpose vehicle which is selling the bonds.

Standard & Poor’s gave the sukuk a BBB+ rating.

SAAD Group, which works in construction and real estate, said in a statement it was raising funds to finance various projects since the acquisition of a stake worth 3.3 billion pounds ($6.6 billion) in HSBC Holdings HSBA.L.

Maan al-Sanea, who owns Khobar-based SAAD Group, said in a British regulatory filing last month that he owned a 3.1 percent stake in HSBC, Europe’s biggest bank, through Singularis Holdings, an investment company based in the Cayman Islands.

Islamic bonds are typically backed by physical assets that pay a dividend or rent to bondholders rather than interest, which Islam equates with usury.

Sanea owns 90 percent of SAAD Group and his wife, Sana al-Gosaibi, owns 10 percent, Moody’s had said in a statement.

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