BSF completes SAR 3 billion Additional Tier 1 sukuk issuance

05/Sep/2024

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The perpetual Additional Tier 1 issuance exhibited a diverse investor base as interest grows for Shariah-compliant solutions in the Kingdom’s robust economy.

28 August 2024, Riyadh, Saudi Arabia – BSF, the leading provider of corporate and commercial banking services in Saudi Arabia, has announced the completion of a SAR 3 billion Additional Tier 1 trust certificates (sukuk), reaffirming its legacy of nurturing sustainable growth in the regional Islamic capital markets landscape.

Issued under BSF’s SAR 8 billion sukuk programme, the private placement attracted significant interest from a diverse investor base, demonstrating the stability of the Kingdom’s capital markets and BSF’s position at the forefront of the regional Islamic finance sector.

“The successful issuance of these Additional Tier 1 certificates speaks to the investment community’s confidence in the solidity and resilience of Saudi Arabia’s economy,” said Bader Alsalloom, Chief Executive Officer of BSF. “Shariah-compliant solutions are crucial to creating long-term investor value, and BSF will continue to enhance the Kingdom’s economic prospects by leveraging its position as the region’s banking partner of choice.”

Indicative of the Kingdom's secure economic environment and its growing prominence as a centre for Shariah-compliant financial transactions, the offering has attracted participation from investors across different sectors in the Kingdom.

Robust investor appetite for the SAR-denominated certificates, which carry a fixed coupon rate of 6 per cent with a call date falling in September 2029, follows a subscription period that ran between 13 to 26 August 2024.

BSF Capital was mandated as the lead manager and bookrunner for the offering. The certificates will be registered in Edaa, the securities depository centre of the Saudi Tadawul Group.

Rated A-/A2/A- by S&P’s, Moody’s, and Fitch, BSF will utilise proceeds from the transaction to unlock further long-term value for its communities of customers, colleagues, and shareholders in Saudi Arabia and beyond.

As a key player in the Saudi financial sector, BSF takes pride in its role as a catalyst for economic development in the Kingdom and its goals under Vision 2030. BSF remains committed to fostering growth through innovative financing solutions that align with Islamic principles.

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