Al Rajhi Bank Issues $1 Billion in Sustainable Sukuk with Final Yield of 6.375%, Receives $3.5 Billion in Orders
Al Rajhi Bank, the global leader in Islamic banking with the largest assets and market capitalization, announced the issuance of $1 billion in Additional Tier 1 (AT1) sustainable sukuk, or Islamic bonds, on Thursday.
According to a document from one of the banks involved in the deal, the final yield for this debt transaction was set at 6.375 percent, which is lower than the initial guidance of approximately 6.875 percent that was previously released.
These notes are perpetual, meaning they do not have a maturity date, but they can be redeemed after May 2029.
The demand for the AT1 bonds was strong, with more than $3.5 billion in orders.
Allocation is anticipated to occur later in the day, as indicated in the document.
AT1 bonds represent the riskiest debt instruments that banks can issue.
They are designed to be perpetual, but lenders have the option to call them after a certain period.