April 2, 2013

Almarai completes sale of US$347 million Islamic bond

The sale of a SAR1.3 billion (US$346.7 million) Islamic bond, or sukuk was completed by Saudi Arabian dairy and food producer Almarai Co.

The issue, which has a floating interest rate, attracted orders worth SAR2.4 billion (US$640 million) from institutional investors inside Saudi Arabia, the statement said. The interest rate was not specified.

It is the second local currency sukuk from the Gulf's largest dairy firm - it sold a SAR1 billion (US$267 million) offering in March 2012. Both deals form part of the same SAR2.3 billion (US$613 million) sukuk programme.

Almarai said on March 4 that it had appointed NCB Capital, the investment banking arm of state-owned National Commercial Bank, to arrange meetings with Saudi fixed income investors ahead of the sukuk's sale.

Shares in Almarai ended 1.1% higher on Monday (Mar 25), against a broader market gain of 0.5%. The sukuk announcement came after the market close.