The Saudi Arabian Mining Company, known as Ma’aden, has successfully priced its debut sukuk at $1.25 billion, an issuance that was oversubscribed by 9.2 times, with total demand exceeding $11 billion for the offered tranches.

The company announced the completion of the sukuk issuance through US dollar-denominated trust certificates, which are set to be listed on the London Stock Exchange’s International Securities Market.

The sukuk may also be sold under Regulation S and Rule 144A of the amended US Securities Act of 1933.

According to a statement shared on the Saudi Stock Exchange (Tadawul), Ma’aden’s Shariah-compliant bond issuance comprises two tranches: a five-year tranche of $750 million priced at 5.25 percent and a 10-year tranche of $500 million priced at 5.5 percent.

The issuance consists of 3,750 trust certificates for the five-year tranche and 2,500 for the 10-year tranche, with each trust certificate valued at $200,000.

The expected settlement date for the issuance is February 13, 2024.

Bob Wilt, CEO of Ma’aden, remarked on the success of the sukuk as a demonstration of investor confidence in the company's growth and strategic direction.

He noted that the strong international demand reflects global confidence in Ma’aden's role in unlocking Saudi Arabia's untapped mineral potential, valued at approximately $2.5 trillion.

Wilt emphasized that the proceeds from the sukuk would facilitate the company’s efforts in securing essential minerals crucial for energy transition and long-term development, contributing to the establishment of a globally competitive mining sector as part of Saudi Arabia’s economic diversification.

Louis Irvine, chief financial officer of Ma’aden, stated that the successful sukuk issuance underscores the company’s solid financial foundation, disciplined financial strategy, and the trust global investors place in its future.

He expressed satisfaction in welcoming new investors, highlighting the importance of their support for Ma’aden’s goal to enhance mining as a key pillar of the Saudi economy, as outlined in the Kingdom’s Vision 2030.

The sukuk issuance aligns with projected growth in the global sukuk market, which is expected to total between $190 billion and $200 billion by 2025, bolstered by activity in regions such as Saudi Arabia and Indonesia.

In 2024, global sukuk issuances reached $193.4 billion, showing a slight decrease from $197.8 billion in 2023; however, foreign-currency-denominated sukuk saw a year-on-year rise of 29 percent, amounting to $72.7 billion.

Under Ma’aden’s International Trust Certificate Issuance Program, the sukuk further cements the company’s financial standing and investor confidence in its long-term growth strategy.

The funds raised from the issuance will bolster Ma’aden’s expansion initiatives, enhancing its position as a leading mining and metals enterprise both domestically and internationally.

The sukuk transaction involved several financial institutions: Citi and HSBC acted as joint global coordinators, joint active bookrunners, and joint lead managers, while Al Rajhi Capital, J.P. Morgan, and SNB Capital also served as joint active bookrunners and joint lead managers.

BNP Paribas, BSF Capital, GIB Capital, Natixis, and Standard Chartered Bank functioned as joint passive bookrunners and joint lead managers, with HSBC acting as rating adviser.

Ma’aden has received ratings of “Baa1” from Moody’s and “BBB+” from Fitch, with expectations that the sukuk will be rated in line with these ratings.

Earlier in January, Ma’aden awarded contracts worth SR3.45 billion (approximately $921.58 million) for the construction of its third phosphate fertilizer plant, involving China National Chemical Engineering Co., Sinopec Nanjing Engineering and Construction, and Turkey-based Tekfen Construction and Installation Co. as the specified contractors.