Saudi Telecom issues $1.25bn debut sukuk

Saudi Telecom — which is 70 percent owned by Saudi Arabia’s Public Investment Fund — started marketing its debut sukuk on Thursday. (Reuters)
Updated 11 May 2019

Saudi Telecom issues $1.25bn debut sukuk

  • The 10-year bonds — the first US dollar denominated sukuk issued by the company — have been arranged by HSBC, JPMorgan, Standard Chartered, Samba, First Abu Dhabi Bank and KFH
  • Saudi Telecom’s new bonds, which will be listed on the Irish Stock Exchange, offer a 3.89 percent return

DUBAI: State-run Saudi Telecom has issued $1.25 billion in international sukuk, or Islamic bonds, the company said on Sunday.
The 10-year bonds — the first US dollar denominated sukuk issued by the company — have been arranged by HSBC, JPMorgan, Standard Chartered, Samba, First Abu Dhabi Bank and KFH.
Saudi Telecom’s new bonds, which will be listed on the Irish Stock Exchange, offer a 3.89 percent return.
That yield is around 25 basis points higher than US dollar-denominated Saudi government bonds with a similar maturity, but around 8 points below international sukuk issued by the state-owned Saudi Electricity Co.
Saudi Telecom — which is 70 percent owned by Saudi Arabia’s Public Investment Fund — started marketing its debut sukuk on Thursday with an initial price guidance of around 155 basis points over midswaps. The final pricing was 20 basis points tighter.
Fund managers said the initial price guidance was “tight” but that the paper would have nevertheless attracted good demand given the low number of sukuk issues in the market and pent up demand from shariah-compliant buyers.
The bonds attracted $4.5 billion in orders, Refinitiv’s IFR, a fixed income news service, reported.


Wamda chief sees Aramco dividend for Saudi economy

Updated 4 min 48 sec ago

Wamda chief sees Aramco dividend for Saudi economy

  • Fadi Ghandour: The initial public offering of Saudi Aramco was a good thing for the Kingdom’s economy and its stock market
  • Ghandour: The decision not to market the IPO directly in some foreign financial centers would make little difference to the outcome of the IPO

BEIJING: Fadi Ghandour, one of the best known entrepreneurs in the Middle East, told Arab News that the initial public offering of Saudi Aramco was a good thing for the Kingdom’s economy and its stock market.

Speaking on the sidelines of the Bloomberg New Economy Forum in Beijing, Ghandour said: “It will be good for the country and for the Tadawul. It will deepen markets and give citizens a sense of participation.”

He added that the decision not to market the IPO directly in some foreign financial centers would make little difference to the outcome of the IPO. “It’s a statement by the Kingdom that it has its own resources, and does not have to rely on others. But I can see how some people would view it negatively. Once Aramco is listed on the market, it will all be much more transparent,” he said.

Ghandour, who runs the startup investment firm Wamda Capital, said the venture capital scene in the Middle East was improving. “Our business is different from the slow down in bricks and mortar. The sovereign wealth funds are finally starting to look at investment in startups and small-to-medium enterprises,” he said, citing recent activity by Saudi Arabia’s Pubic Investment Fund and Mubadala of the UAE.

“There are increasing opportunities in fintech and and e-commerce,” he said.

He said the investment strategy of other big players, like the Saudi and UAE-backed Vision Fund, was flawed. “Throwing a lot of money at companies with high valuations blunts their need to show a serious path to profits. Management loses its edge. The path to profitability is not through having a big brother with lots of money. Startup companies survive because they have a path to profitability,” he said.

Ghandour said he was in Beijing because he wanted a “Chinese perspective” on business. “The Middle East is looking increasingly eastwards, and that’s a good thing. China is always looking for new markets and resources, and they are increasingly innovators these days rather than copiers. They want to be leaders in business,” he added.