Saudi British Bank, the lender 40 percent owned by HSBC Holdings Plc, raised 1.5 billion riyals ($400 million) from a private placement of Islamic bonds.
The bank issued the five-year, floating-rate notes to return 120 basis over the three-month Saudi Interbank Offered Rate, according to data compiled by Bloomberg. HSBC Saudi Arabia Ltd. was the sole sale manager. Saudi British also bought back 1 billion riyals of a 1.705 billion-riyal senior note maturing in July 2013. The amount outstanding is 705 million riyals.
The bank is the fourth issuer in the world’s biggest oil exporter to sell Islamic debt so far this year. Saudi Electricity Co., the state-controlled power utility, sold a combined $1.75 billion of five-year and 10-year sukuk yesterday. Saudi Arabia’s General Authority of Civil Aviation raised 15 billion riyals ($4 billion) in January, the biggest Shariah-compliant offering so far this year.
Islamic bond sales in the Persian Gulf are having the best start to the year on record with offerings rising to $7.9 billion from $1.53 billion in the year-earlier period, data compiled by Bloomberg show. The average yield on sukuk in the six-nation Gulf Cooperation Council fell 37 basis points in 2012 to 3.94 percent yesterday, according to the HSBC/NASDAQ Dubai GCC US Dollar Sukuk Index. The yield fell to 3.93 percent on March 21, the lowest since Oct. 31.