RCS - Saudi Electr. Global - Saudi Electricity Co. issues a US$2 billion Sukuk

Moody'sAnnouncement

04/04/2023 13:15

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RNS Number : 3449V  Saudi Electricity Global Sukuk Co  04 April 2023

Saudi Electricity issues a US$2 billion dual-tranche Sukuk in the
international markets.

 

Eng. Khaled Al-Gnoon, President and CEO of the Company said, "The issuance
supports the Company's aspirations to finance its projects through innovative
and sustainable financing solutions, and confirms the growing confidence of
international investors in Saudi companies and the strength of the national
economy of the Kingdom and its prospects for prosperity and development under
the vision of Saudi Arabia 2030."

 

Saudi Electricity Company (SEC) has announced the successful completion of a
US$2 billion dual-tranche Sukuk consisting of Green and conventional tranches,
under its international Sukuk program. The green tranche raised $1.2 billion
in 10-year tenor at fixed profit rate of 4.632% p.a., priced at a spread of
120 basis points (bps) over 10years US Treasuries,  representing  a 45bps
tightening from announced IPTs. Furthermore, the conventional tranche raised
US$800 million in 30-year tenor at fixed profit rate of 5.6% p.a., priced at a
spread of 205 basis points over 30years US Treasuries, representing a 35bps
tightening from announced IPTs. The pricing of the deal is considered to be in
line with the pricing of the Saudi Arabian government's sovereign Sukuk.

 

On Thursday, March 30, 2023, the company announced its intention to hold
meetings with fixed income investors in preparation for a potential Sukuk
issuance. Following a virtual roadshow that received an overwhelming
participation of international investors in Asia, Europe, and the Middle East.
The roadshow included a global conference call in which a large number of
fixed income investors participated. During the call, the investment story of
the Saudi Electricity Company, its sustainability ambitions, and
specifications of the potential green Sukuk were presented. Following the
roadshow, the order book for the issuance was opened on Monday, April 3, 2023,
and closed on the same day, with a total order book value of 15.4 billion US
dollars, with an oversubscription rate exceeding ~7.7 times for both tranches.
The order book is considered as highest order book for a regional Corp issuer
in over a year. Furthermore, through the transaction SEC achieved the rare
feat of issuing a 30-year Sukuk, which only few issuers globally have been
able to place in the markets. The Sukuk issuance received strong demand from
international investors with over 350 investors participating in the order
book, including local and international financial institutions from more than
27 countries in Asia, Europe, and the Middle East.

 

Engineer Khaled Al-Gnoon, the president and CEO of SEC, commented on the
successful issuance of the company's Islamic Sukuk, saying " We are very
pleased with the large demand from international investors and their
confidence in the investment story of Saudi Electricity Company, its
creditworthiness, and the growing confidence of international investors in
Saudi companies and the strength of the national economy of the Kingdom, and
its prospects for prosperity and development under the Vision 2030.

Furthermore, Eng. Al-Gnoon added, "This Sukuk offering aligns with the
Company's strategy to diversify its funding sources and expand its investor
base in international markets. It also supports the Company's aspirations to
finance its projects through innovative and sustainable financing instruments"
.

 

SEC has high investment grade credit ratings from international rating
agencies, with credit ratings of A1, positive outlook by Moody's, and A,
stable outlook by both Fitch and Standard & Poor's.

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