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Oil, Gas, Petrochemical Industry News
News Release from: SABIC
Edited by the Processingtalk Editorial
Team on 06 July 2006
SABIC set to launch its debut Islamic
Sukuk
The Saudi Capital Market Authority has given approval to SABIC to launch issuance of Sukuk in a total amount up to SAR 3 billion, the first to be launched under the new Saudi Capital Market Law
The Saudi Capital Market Authority (CMA) has given approval to SABIC to launch issuance of Sukuk in a total amount up to SAR 3 billion The minimum value set for each of these Sukuk is SR 50,000
This article was originally published on Processingtalk on 18 Jul 2003 at 8.00am (UK)
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The minimum subscription shall be SR 500,000 (10 Sukuk per subscriber).
If the amount is greater than SR 500,000, it will be calculated in multiples of SR 50,000.
This Sukuk will be the first to be launched in Saudi Arabia under the new Capital Market Law.
Further reading
Ethylene and propylene project on Red Sea coast
Saudi Basic Industries Corporation has signed a Letter of Intent with Technip for the engineering, procurement and construction of an ethylene and propylene plant at the YANSAB Complex in Saudi Arabia
Petrochemicals industry trends and challenges
SABIC explain that the petrochemical industry is undergoing major structural changes with particular respect to feedstocks, geography and demographics
HSBC Group, one of the world's largest banking and financial services organizations, has been appointed as the lead manager and book runner for this pioneering issuance.
To be issued directly by SABIC, the SABIC Sukuk will be the first to be approved by a Shariah Committee of a Saudi Arabian Bank, the SABB Amanah Shariah Supervisory Committee.
The Sukuk will also score first on a number of other fronts, notably the first to be admitted on the official list of the CMA, the first fully tradable Sukuk to be issued in the Kingdom, and the first to be settled/cleared through Tadawul (Saudi Stock Exchange).
The Sukuk will establish a template for other Sukuk and non-equity capital market issuances to follow, thereby further facilitating innovation and economic growth in Saudi Arabia.
Initially, issuance shall be limited to financial institutions and major companies.
Individuals may participate through various bank investment funds.
Other issuances will expand to cover individuals directly following completion of essential mechanisms of the component authorities.
SABIC Sukuk is unique in many ways and with minimal risks.
It is directly underpinned by a financially sound world leading company with diversified investments in basic industries.
SABIC has increasingly begun utilising Islamic financing techniques for its fundraising.
The company recently raised the largest ever Islamic finance tranche in a Greenfield project with the financing for the YANSAB affiliate, in addition to a recent one billion US$ Murabaha finance agreement with Deutsche Bank.
This Sukuk demonstrates the SABIC continued commitment towards developing the scope and breadth of Islamic financing.
SABIC Sukuk further demonstrates SABIC endeavours to diversify the sources of finance for its investment projects which will contribute to developing the Saudi Capital Market and help develop the Saudi economy.
More detailed information on the Sukuk is available on the SABIC and SABB Bank websites.
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