Banque Saudi Fransi prices US$750 million, five-year Sukuk (See IFN)

SAUDI ARABIA: Banque Saudi Fransi (BSF) has priced a US$750 million, five-year Sukuk at par with a spread of 185 basis points (bps) over midswaps, or 2.95%, following an initial price guidance of a 200 bps spread.

The offering attracted orders worth US$4 billion.

Citi, Credit Agricole and Deutsche Bank were the lead arrangers of the transaction; yet another to come out of Saudi’s burgeoning Islamic bond market.

The Sukuk marks BSF’s first Shariah compliant offering. The bank is part-owned by Credit Agricole, which earlier in the year said that it was also looking at issuing a Sukuk for its Islamic business, of which a large part has moved to Dubai from Bahrain.

The issuance is also seen to have received strong regional support, despite prevailing uncertainty in the Eurozone. “We have seen regional buyers support deal momentum and pricing increasingly over the last six months. Despite the troubles in the rest of the world, the [Gulf] region has its own microclimate,” a Gulf-based debt capital market official is quoted as saying.

BSF’s Sukuk also brings optimism on the growing participation of western, conventional banks in Islamic finance. Much like the effect Goldman Sachs’ planned US$2 billion Sukuk was to have on the market, BSF’s Sukuk is also seen as an affirmation of the increasing importance of Shariah compliant finance in the conventional markets; cementing Islamic finance’s role as an alternative source of funding.

As a result, BSF’s successful sale could further help shine the spotlight on Islamic finance and lead the way for further Shariah compliant offerings from conventional institutions.


See: http://redmoney.newsweaver.co.uk/1iq9x162l69h38rwoni3wx?email=true&a=6&p=24145225&t=21253865