HSBC and NCB Capital announce completion of SR15bn GACA sukuk

Updated 07 October 2013

HSBC and NCB Capital announce completion of SR15bn GACA sukuk

HSBC and NCB Capital announced the completion of the largest ever government guaranteed sukuk in Saudi Arabia for the General Authority of Civil Aviation (GACA). Totaling SR15.211 billion ($4.056 billion), the sukuk achieved a profit rate of 3.21 percent p.a. (per annum).
HSBC and NCB Capital acted as joint lead managers and bookrunners of the sukuk. Additionally, HSBC acted as the sukuk coordinator, sole Shariah coordinator, and agent of sukuk holders and payment administration. Standard Chartered Saudi Arabia was co-lead manager for the issuance.
Walid Khoury, CEO of HSBC Saudi Arabia Ltd., said: “This is the second great achievement for GACA, and stands as a testament of the confidence local investors have in this high quality name. Not only did it raise SR15.211 billion for the authority, but it’s done so at an attractive profit rate of 3.21 percent p.a. with a diverse set of investors participating.”
Jawdat Al-Halabi, CEO of NCB Capital, said: “We are honored to have jointly led this strategic transaction in support of the government’s plans to expand the Kingdom’s infrastructure. The sukuk market, both globally and in the Kingdom has been gaining momentum in recent years and we see this trend continuing and reflected in the huge demand by investors for this issue.”
This deal was 1.9 times oversubscribed with strong demand from a wide range of investors, including banks, sovereign funds, pension agencies, insurance companies and corporates. This diversity of investors means that any subsequent issuance won’t be over reliant on any one sector and GACA could tap into a ready investor base. This sheer scale of the demand and the eventual pricing demonstrates the confidence buyers have in both the region and its government.
Fahad Alsaif, head of capital markets and corporate finance, HSBC Saudi Arabia, said: “Many sukuk of this size are issued in multiple tranches, with different prices and dates of maturity. However, this sukuk has been launched as one single issuance, and in doing so has become the largest single-tranche sukuk ever issued in Saudi Arabia.”
Hicham Hatoum, head of investment banking at NCB Capital, says: “The fact that the largest ever Saudi riyal issue attracted a demand of this magnitude is a testament to the lead managers’ joint drive to diversify the targeted investor base. We were pleased to attract insurance companies and corporate sector treasuries alongside traditional government and bank investors.”
Boutros Klink, CEO of Standard Chartered Capital, said: “The Saudi debt capital markets are fast growing and an issuance of this scale demonstrates the depth of the market. We look forward to becoming an active participant in developing the Kingdom’s debt capital markets and are thankful to the authority for giving the opportunity to contribute to the success of this transaction.”


Additionally, this issuance is also approved by the Saudi Arabian Monetary Agency (SAMA) to be eligible for repo arrangements and has also been assigned zero percent risk weighting for capital adequacy calculation purpose. This means that investors can hold this sukuk as an investment, but also use it as an effective liquidity tool by using it to guarantee cash from the central bank.


Tunisia’s tourism industry hit hard by coronavirus pandemic

Updated 27 September 2020

Tunisia’s tourism industry hit hard by coronavirus pandemic

  • Tourism accounts for about eight percent of Tunisia’s national output

DUBAI: Tunisia’s tourism industry has been hit hard by the coronavirus pandemic, and is expected to decline further before 2020 ends.

Tourist activity has shrunk by 60 percent, the country’s tourism minister Habib Ammar said, and that figure could reach 70 percent to reflect the World Tourism Organization’s estimate for global tourism.

Tourism accounts for about eight percent of Tunisia’s national output and is the country’s second biggest employer, with around 400,000 people involved in the industry, after the agricultural sector.

The number of tourists rose 13.6 percent to 9.5 million in 2019, a record level, but Tunisia’s 10-million-visitor target for this year was sidelined when the coronavirus pandemic hit.

Despite this quandary, the government is considering various proposals to help stakeholders in the sector, state news agency TAP reported.

A gradual recovery of tourism activity will be recorded next year, both worldwide and nationwide, ensuring that the tourist units that will be preserved will have the capacity to accommodate tourists, it added.

Ammar also said that government remains committed to implement support plans such as the rescheduling of the settlement of bank and social security fund debts, and extending credits over longer repayment periods.

The tourism ministry is working with all intervening parties to implement this measure, which will make it possible to provide liquidity to the tourist units, and consequently, to guarantee a better future for the tourist activity, he added.

“This will also allow the ministry to develop a strategy and a clear plan for the sector in the medium and long term.”