RIYADH, 19 April 2007 —  A company owned by a Saudi businessman said yesterday it was seeking to borrow $5 billion to finance investments, including the purchase of a 3.3 billion pound ($6.63 billion) stake in HSBC Holdings.

Maan Al-Sanea, who owns Alkhobar-based Saad Group, said in a British regulatory filing on Monday that he owned 360 million shares in Europe’s biggest bank, or a 3.1 percent stake, through Singularis Holdings, an investment company based in the Cayman Islands.

Saad Group, which works in construction and real estate, said in a statement that it was seeking to raise the funds “to finance projects it has launched in various sectors, since the group announced the conclusion of a large financial deal, in which Singularis group, affiliated to the (Saad) Group, took a 3 percent stake in HSBC.”

The company, started in 1980 and worth $4.6 billion, plans to buy stakes in other “giant” banks, it said, without giving details.

Sanea already owns stakes in lenders such as Citigroup and Bank of China.

As part of the borrowing program, Saad Group unit Saad Trading & Contracting Co. plans to sell benchmark-size Islamic bonds, or Sukuk, spokesman Mohamed Moqeabel told Reuters by telephone.

“The Sukuk issue is expected to be completed before the end of this year,” Moqeabel said, declining to give details.

Pricing of the five-year Sukuk will be “comparable” with 80-90 basis points over the London Interbank Offered Rate, said Rami Falah, head of Islamic banking in the Middle East at BNP Paribas, which is arranging the bond sale. Falah said final pricing would be set after a road show.

Benchmark generally means at least $500 million.

Saad Trading is selling the bonds to fund real estate and other investments, and to refinance debt, ratings company Standard & Poor’s said yesterday. The company gave the Sukuk a BBB+ rating.

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

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

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