Saudi Arabia to issue new US dollar-denominated bonds and sukuk

Saudi Arabia to issue new US dollar-denominated bonds and sukuk
The price guidance for the new notes was around 135 basis points over US treasuries for sukuk (Shutterstock)
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Updated 18 October 2022

Saudi Arabia to issue new US dollar-denominated bonds and sukuk

Saudi Arabia to issue new US dollar-denominated bonds and sukuk

RIYADH: Saudi Arabia is planning to issue new bonds and sukuk denominated in US dollars while offering their holders the opportunity to acquire existing notes in exchange for cash.

The price guidance for the new notes was around 135 basis points over US treasuries for sukuk and 180 basis points over US Treasury bonds for conventional bonds, respectively, according to London Stock Exchange filings.

Saudi Arabia’s finance ministry has also extended a tender call to holders of the country’s $3 billion bonds due in 2023, $4.5 billion notes due in April 2025, $2.5 billion bonds due in October 2025, and $5.5 billion notes due in 2026.

The amount of the tender offer that will be accepted will be revealed following the pricing of the new bonds and sukuk, which is expected later today.

The deadline for bondholders to participate in the tender offer is Oct. 24, and an indication of the results will be available the next day.

BNP Paribas, Goldman Sachs and HSBC are global coordinators and joint bookrunners on the debt sale, while Aljazira Capital, Citi, JPMorgan and Standard Chartered are passive joint lead managers and bookrunners.

Early this month, Saudi Arabia’s sovereign wealth fund issued green bonds to raise $3 billion.

The Public Investment Fund is at the center of Saudi Arabia’s ambitious reform plans being spearheaded by Crown Prince Mohammed bin Salman to wean the economy off oil.

The crown prince said in December that it would invest about $40 billion in the local economy this year, after spending about $22 billion last year.

Reuters reported in July last year that PIF was setting up a financing framework that would allow it to raise green bonds.

In February, PIF announced a green finance framework that showed net proceeds from a debt sale would go toward eligible projects, including in renewable energy, clean transport and green buildings.

The deal is expected to raise billions of dollars, sources have said.

Fitch Ratings and Moody’s in February assigned PIF an ‘A’ and ‘A1’ credit rating, respectively.

PIF started raising bank debt in 2018 with an $11 billion facility, followed in 2019 by a $10 billion loan which it then repaid in 2020.

Those loans were provided by what PIF has called its core banking group comprising Bank of America, BNP Paribas, Citi, Credit Agricole, HSBC, JPMorgan, Mizuho, MUFG, Standard Chartered and SMBC.

In March last year, the wealth fund raised $15 billion from 17 banks comprising most of the core banking group, as well as Credit Suisse, Deutsche Bank, First Abu Dhabi Bank, Goldman Sachs, Intesa Sanpaolo, Morgan Stanley, Natixis and Societe Generale.


Oil Updates — Crude climbs after OPEC+ meeting; Japan sets price cap on Russian crude  

Oil Updates — Crude climbs after OPEC+ meeting; Japan sets price cap on Russian crude  
Updated 16 sec ago

Oil Updates — Crude climbs after OPEC+ meeting; Japan sets price cap on Russian crude  

Oil Updates — Crude climbs after OPEC+ meeting; Japan sets price cap on Russian crude  

RIYADH: Oil prices rose as much as 2 percent on Monday after the Organization of Petroleum Exporting Countries and its allies, known as OPEC+, held their output targets steady ahead of an EU ban and a price cap kicking in on Russian crude. 

At the same time, in a positive sign for fuel demand, more Chinese cities eased COVID-19 curbs over the weekend, though a patchwork easing in policies sowed confusion across the country on Monday. 

Brent crude futures were last up 72 cents, or 0.8 percent, to $86.29 a barrel at 0430 GMT, while US West Texas Intermediate crude futures gained 70 cents, or 0.9 percent, to $80.68 a barrel. 

OPEC+ agreed on Sunday to stick to their October plan to cut output by 2 million barrels per day from November through 2023. 

Japan sets price cap on Russian crude oil, excluding Sakhalin-2 

Japan implemented a price cap on Russian crude oil from Monday, but crude oil imported from the Sakhalin-2 plant will be excluded, the government said in a statement. 

The decision follows an agreement by the Group of Seven nations and Australia on Friday to limit the price of Russian crude oil at $60 per barrel in the latest move to slap sanctions on Moscow over its war in Ukraine. 

The exclusion of crude oil from the far eastern Russian Sakhalin-2 project, which Japanese energy operators hold stakes in after the exit of Shell, was decided “in light of Japan’s energy security,” the government said in the statement. 

Further measures on Russian petroleum products, set to begin on Feb. 5, 2023, will be announced at a later date, the statement added. 

Algeria says OPEC+ decision to keep output unchanged appropriate 

Algeria’s energy minister said on Sunday that the OPEC+ decision to keep output unchanged was appropriate to market fluctuations, the country’s state news agency reported. 

The OPEC+ group will closely monitor crude markets for any developments, minister Mohamed Arkab said in remarks after its Sunday meeting, adding that the decision kept Algerian output unchanged at 1.007 million bpd. 

(With input from Reuters) 

 

 


Saudi Arabia’s Capital Market Authority approves regulations of market-marking and procedures

Saudi Arabia’s Capital Market Authority approves regulations of market-marking and procedures
Updated 05 December 2022

Saudi Arabia’s Capital Market Authority approves regulations of market-marking and procedures

Saudi Arabia’s Capital Market Authority approves regulations of market-marking and procedures
  • The CMA’s approval aims to regulate the activities of listed securities market-making, and impacts resulted from approving the market making registration application

RIYADH: Regulations proposed by the Saudi excange around market-making procedures have been approved by the Capital Market Authority (CMA), it was announced on Sunday.

The CMA’s approval aims to regulate the activities of listed securities market-making, and impacts resulted from approving the market making registration application, and description of mechanism of practicing market making activities on securities, a statement said.

The statement continued that regulations include the market-maker’s activities through providing continuous listed securities buy/sell orders during the market open session to provide liquidity to the relevant listed securities.

Also, among the conditions of the market-maker, it shall have a membership of the market or derivatives market and shall have the written policies and procedures to separate between the market making activities and any other activities practiced by the maker.

This maker shall also have the security and technical requirements necessary for practicing the activity, or any other condition proposed by the market and approved by the CMA.

The regulations set out the Market Maker’s liabilities; among them, to assign an account at the Securities Depository Center (Edaa) (where applicable) and Securities Clearing Center Company (Muqassa) that are limited to practicing activities of market making only on specific security (securities) in accordance with the Market Making Agreement.

Also, all activities of market making practiced by the market-maker shall be in compliance with the Capital Market law, its implementing regulations and the market rules, and any other relevant laws.

The CMA’s approval on the market-making regulations and procedures comes as part of the CMA’s continuous efforts to create potentials facilitating trading process, including increasing efficiency and volume of liquidity in the capital market through providing continuous listed securities buy/sell orders.


Saudi National Development Fund launches operations at SME Bank 

Saudi National Development Fund launches operations at SME Bank 
Updated 04 December 2022

Saudi National Development Fund launches operations at SME Bank 

Saudi National Development Fund launches operations at SME Bank 

RIYADH: In a move to bridge the financing gap in the small and medium enterprises sector, Saudi Arabia’s National Development Fund has announced the start of operations at the Small and Medium Enterprises Bank.

The opening of the new bank will help the SME sector contribute as much as 35 percent to Saudi Arabia’s gross domestic product in line with the Saudi Vision 2030. 

Launched in 2021, the bank focuses on providing all its products and services in digital form without the need to establish branches. 

In an attempt to create partnerships and further enhance the contribution of financial institutions in terms of financing SMEs, the bank signed a total of 15 cooperation agreements, worth an accumulated SR3 billion ($797 million), with several financial institutions, Alarabiya reported. 

Overall, Saudi Arabia is witnessing an acceleration in licensing SME factories while taking advantage of government facilities to stimulate specific sectors and industries related to the fourth industrial revolution. 

In November, Saudi Arabia’s cabinet approved the Small and Medium Enterprises Bank System, according to the Saudi Press Agency.     

Ministers signed off the transfer of Kafalah SME Loan Guarantee Program from Monsha'at to SME Bank.

This comes as industrial SMEs in Saudi Arabia are urged to transform into resilient and technologically savvy operations in order to go global and be able to compete internationally, according to a report by the multinational professional services network KPMG. 

Moreover, the SME sector is perceived as a vital economic engine, a key generator of new employment, and the foundation of the global economy, senior vice president of technical services at Aramco, Ahmad Al Sa’adi said, in an exclusive interview with Arab News earlier. 

In addition to this, SMEs are set to play a significant role in achieving Saudi Arabia’s objectives of lowering the unemployment rate from 11.6 percent to 7 percent, and increasing women’s participation in the workforce from 22 percent to 30 percent. 

In October, the Saudi Arabian Oil Co, also known as Aramco, announced the launch of the Taleed Program, which aims to maintain and further grow the SME sector, Al Sa’adi added. 

 

 


Oman’s Jindal Shadeed to invest $3bn to produce green steel at Port of Duqm 

Oman’s Jindal Shadeed to invest $3bn to produce green steel at Port of Duqm 
Updated 04 December 2022

Oman’s Jindal Shadeed to invest $3bn to produce green steel at Port of Duqm 

Oman’s Jindal Shadeed to invest $3bn to produce green steel at Port of Duqm 

RIYADH: Omani steel giant Jindal Shadeed Group intends to set up a $3-billion factory to produce “green steel” using renewable energy in the Special Economic Zone at the Port of Duqm on the country’s southeastern coast, SEZAD. 

The new operation aims to produce five million tons of green steel a year, creating over $800 million per annum in value addition, it said in a press release. 

The company, a part of the $22-billion Jindal Group, will supply high-quality steel products to sectors such as automotive, wind energy and consumer durables. It sees a booming demand for green steel from environmental, social, and corporate governance-conscious customers around the world, especially in Europe and Asia, who have already committed to a significant reduction in Scope 3 emissions by 2030, according to Group CEO Harssha Shetty. 

An MoU was signed by Shetty and Ahmed bin Hassan Al Dheeb, deputy chairman of the Public Authority for Special Economic Zones and Free Zones, while a land reservation agreement for the site for the project was also signed between the Group and Reggy Vermeulen, the port’s CEO.  

The Group, which claims to be Oman’s largest steel producer, also signed an MoU with the centralized utility provider, Marafiq, to provide the plant with the utilities necessary to operate the project such as water services and seawater for cooling purposes.  

Commenting on the agreements, Al Dheeb said: “The signing of the MoU and agreement is a testament to the importance of SEZAD and emphasizes its position as a leading and attractive destination for large strategic projects that will benefit from renewable energy and green hydrogen.”   

He said the availability of solar energy and wind resources throughout the year will encourage more investments in green industries and renewable energy projects in Duqm.   

Oman is making efforts toward using cleaner sources of energy to meet industrial requirements. Al Dheeb said the efforts are in line with the priorities of Oman Vision 2040 to use alternative energy and sustainable natural resources. “The project also serves the comprehensive national strategy to reduce emissions and achieve carbon neutrality,” he added. 

Shetty revealed that Jindal Shadeed Group has already obtained the necessary approvals to secure the land for our green hydrogen-ready steel project.    

Reggy Vermeulen added: “This green steel project aligns very well with the port’s economic diversification and reduction in reliance on the oil and gas sector. It will not only attract foreign investment, but also provide work opportunities for local talent.” 


TASI sheds 98 points; Aramco’s Luberef IPO to raise $1.32bn: Closing bell  

TASI sheds 98 points; Aramco’s Luberef IPO to raise $1.32bn: Closing bell  
Updated 04 December 2022

TASI sheds 98 points; Aramco’s Luberef IPO to raise $1.32bn: Closing bell  

TASI sheds 98 points; Aramco’s Luberef IPO to raise $1.32bn: Closing bell  

RIYADH: Saudi Arabia’s benchmark index shed 98 points on Sunday as investors shied away from the market due to uncertainties in the global economy, triggered by ongoing geopolitical tensions and soaring inflation.  

The Tadawul All Share Index, known as TASI, was down 0.91 percent to 10,723, while the parallel market Nomu slipped 14 points or 0.99 percent to 1,485.  

Of the 219 companies listed on TASI on Sunday, 31 advanced, while 176 declined.  

According to the data from Tadawul, the total trading turnover closed at SR2.9 billion ($770 million) on Sunday.  

The most crucial announcement that came during the early hours of trading on Sunday was from Saudi Aramco Base Oil Co., also known as Luberef, which decided to raise up to SR4.95 billion from its initial public offering.  

According to a statement, Luberef will sell nearly 30 percent of the firm’s issued share capital, or 50.045 million shares, at between 91 and 99 riyals each.  

The final share price is expected to be unveiled next Sunday, with subscriptions for individual investors running from Dec. 14 -18.  

A date is not yet been finalized for shares to begin trading on the Tadawul exchange. 

Saudi Aramco owns 70 percent of Luberef, while Saudi investment bank Jadwa holds the remaining 30 percent.  

According to the statement, Jadwa Investment is selling the entire stake it acquired in 2007 from Exxon Mobil Corp. 

SNB Capital, Morgan Stanley, HSBC Holdings Plc and Citigroup Inc. are managing the IPO for Luberef.  

On Sunday, share prices of Allied Cooperative Insurance Group, rose 7.09 percent to lead the gainers, followed by the Power and Water Utility Co. for Jubail and Yanbu, known as Marafiq which went up 2.56 percent.  

Aramco, the largest player in the Saudi oil market, was down 0.30 percent at the end of Sunday’s trading session. 

The top fallers were Theeb Rent a Car Co., Saudi Arabian Amiantit Co., Saudi Enaya Cooperative Insurance Co., and Etihad Atheeb Telecommunication Co.  

In the banking sector, Alinma Bank and Al Rajhi Bank went down 2.37 percent, and 0.12 percent respectively.  

In the food and beverage sector, Almarai Co. went up 0.37 percent.