Riyad Bank issues sustainable sukuk or bond offerings in US dollar

Dubai: Riyad Bank is set to issue dollar denominated additional Tier 1 sustainable sukuk, or sharia-compliant bonds, as part of its additional Tier 1 capital sukuk programme, which was established on September 10, 2024, following a board decision on August 19, 2024.

Tier 1 capital is the primary funding source of the bank and consists of shareholders' equity and retained earnings.

In a filing with Tadawul, the bank announced that the sukuk issuance will be managed through a special purpose vehicle (SPV) and offered to qualified investors both domestically and internationally, according to a report by Saudi financial news portal Argaam.com.

Riyad Bank has appointed HSBC Bank PLC, Kamco Investment Co. K.S.C.P., Merrill Lynch International, Mizuho International, Morgan Stanley & Co. International, Riyad Capital, SMBC Nikko Capital Markets Limited, Standard Chartered Bank, and Warba Bank as joint lead managers and bookrunners for this potential issuance.

The bank indicated that the value and terms of the sukuk offering will be set according to market conditions. The issuance aims to bolster its Tier 1 capital and will be allocated for general banking purposes.