KHOBAR, Saudi Arabia Nov 7 Riyad Bank
, the third-largest lender by market value in the
kingdom, sold an Islamic bond worth 4 billion riyals ($1.07
billion) through a private placement, it said in a bourse filing
The bank priced the issue at 0.68 percent over the
three-month Saudi interbank lending rate. The sukuk
has a lifespan of seven years but can be called - or repaid - by
the bank at the end of the fifth year.
The sukuk, a rare offering from the bank, will be used to
diversify its funding sources, extend the maturity of its
funding and support the financing of sharia-compliant business,
the statement added.
Riyad Bank is the latest Saudi lender to issue a
riyal-denominated sukuk, tapping into a highly liquid local
investor pool to secure cheaper, longer-term finance that would
be hard to obtain through the loan market.
Many banks have issued or plan to issue Islamic instruments
to boost their capital following a period of significant lending
growth in the kingdom. They include Saudi Hollandi Bank
, Saudi British Bank, Banque Saudi Fransi
and National Commercial Bank.
(Reporting by Reem Shamseddine; Editing by Andrew Torchia)