Dubai: A $1.25 billion 10-year debut sukuk of Saudi Telecom, which is 70 per cent owned by the Public Investment Fund (PIF), was over-subscribed nearly 4 times and the pricing was 20 basis points tighter than the initial guidance.
Saudi Telecom received bids worth $4.5 billion for a $1.2 billion sukuk, sources told Gulf News. Saudi Telecom’s initial price guidance was at mid-swaps plus 155 basis points, which was then revised to 140-135 basis-points and the final pricing came in at mid-swaps plus 135 basis points, 20 basis points tighter than the original pricing.
“Saudi Telecom benefited from the fact that it’s a sukuk, it offered sector diversification and highly rated. We are not surprised to see it getting over-subscribed 4 times with tighter pricing,” Anita Yadav, Head of Fixed Income Research, Senior Director, Wholesale Banking at Emirates NBD, told Gulf News.
The pricing was independent to that of Saudi Aramco, which is 100 per cent owned by the PIF.
“Saudi Telecom issued a sukuk, so the chances of it being held by local investors is higher than Saudi Aramco. It should be more stable than Aramco, Aramco’s production levels are guided by the Opec. So Saudi Telecom is a true corporate in that manner. I would not relate this pricing change to Saudi Telecom,” Yadav said. Saudi Aramco had received bids of $100 billion (Dh367.2 billion) for a $12 billion bond issue that happened in early April. On Sunday, Aramco 2029 bond price widened 1 basis points as the benchmark yield also went up by 1 basis point. “The movement is due to the benchmark yield curve was slightly volatile after the Fed announcement last week,” Yadav added.