Dubai: Saudi Arabia's Dar Al Arkan Real Estate will likely issue a five-year fixed-rate Islamic bond worth between $500 and $750 million (Dh2.7 billion) by the end of the week, two bankers with knowledge of the deal said Monday.
The Islamic bond, or sukuk, could be priced to yield between 10.5-11 per cent, they said.
"They have been struggling," one banker said referring to the interest in the sukuk.
"They still haven't closed anything and they have been on the road for a long time now. 10.5 per cent is not something that would make me excited. Mid-teens would have been good."
The roadshow has been held in the Middle East, Europe, Asia and the United States.
The new bond will likely be used to refinance a $600 million sukuk due in mid-February.
Expenditure plans
The bonds proceeds will help finance 2.7 billion riyals of capital expenditure during 2010, a prospectus for investors showed. Deutsche Bank, Goldman Sachs and Unicorn Investment Bank are arranging the sale.
Dar Al Arkan reported a 10 per cent decline in 2009 net profits last month to $566 million from $629 million in 2008.
