* Saudi Electricity prices 3rd sukuk at 95 bps above Sibor
* Previous sukuk were priced at 160 bps above Sibor
(Adds details, background)
RIYADH, May 5 Price guidance for state-run Saudi
Electricity Co's (SEC) 5110.SE five-year Islamic bond is at 95
basis points above the Saudi Interbank Offered Rates (Sibor), a
lead manager said on Wednesday.
This is below the 160 bps premium above Sibor at which the
Gulf's largest power utility by market value priced its previous
sukuk issue of 7 billion riyals ($1.9 billion) in 2009.
The lower yield is significant because it could underscore
an easing in credit conditions in Saudi Arabia after a tough
SEC Chief Executive Ali Saleh al-Barrak said last month the
group would raise between 5 billion riyals and 7 billion from
the current issue, its third since 2007. [ID:nLDE63A0D8]
SEC has yet to decide the final size of the issue, said
Rajiv Shukla, managing director and head of global capital
finance at HSBC Saudi Arabia.
"The sukuk issue has been priced at 95 bps above Sibor. They
have not yet fixed the amount as the book is still open and will
be closed later today.
"The company will decide on the allocation later this week
and will fix the amount to be taken by Sunday or Monday," Shukla
HSBC and Samba Financial Group are joint lead managers on
A source familiar with the deal said the company would raise
7 billion riyals from the issue. "Saudi Electricity will take
the maximum amount given the attractive pricing," the source
SEC spokesman Joumaan al-Zahrani declined to comment saying
only that the issue had already been oversubscribed.
In addition to the 7 billion riyals SEC raised last year,
the company took another 7 billion from a maiden issue in 2007.
Saudi firms are leading a gradual recovery in regional debt
markets after Dubai's government in March unveiled a $9.5
billion support plan for conglomerate Dubai World [DBWLD.UL],
which rattled markets in November with news it would ask for a
standstill on some of its debt.
As a result, Gulf Arab fixed-income markets remained largely
shut for months, but are now slowly reopening with a series of
issues led mainly by Saudi firms.
Banque Saudi Fransi 1050.SE raised $650 million in a bond
sale in March. [ID:nLDE62N06O]
In February, builder Dar al-Arkan 4300.SE raised a
lower-than-expected $450 million from a sukuk issue a few weeks
after Saudi Hollandi Bank 1040.SE raised $193 million from its
second sale of a sukuk under a private placement.
(Reporting by Souhail Karam; Editing by Firouz Sedarat and
($1=3.750 Saudi riyals)