London Stock Exchange welcomes Riyad Bank celebrating Riyad Bank tier 2 USD sukuk

London Stock Exchange welcome Riyad Bank for a Market Open Ceremony, to celebrate the admission of USD 1.5 bn USD Tier 2 Sukuk. The Market Open Ceremony was attended by Riyad Bank senior management, including CEO Mr. Tareq Al Sadhan, Saudi Ambassador to the UK His Royal Highness Prince Khalid Bin Bandar Al Saud, Rt Hon Conor Burns MP, Minister of State DIT and other dignitaries. 

The transaction is novel because it is the first ever Basel III compliant USD Tier 2 Sukuk from the region and Saudi Arabia. It is also the largest issue size raised in a debut Sukuk from the region and the pricing achieved is one of the lowest compared to Tier 2 instruments globally. 

Riyad Bank is the only bank to have an outstanding USD-denominated Tier 2 Sukuk in the market, paving the path for other Saudi issuers and setting a benchmark for the region. The investor demand for the Sukuk was one of the highest seen for GCC issuers, with the orderbook reaching USD 8.3bn, representing an oversubscription rate of 5.5 times. The diversity of the orderbook was remarkable and saw 282 investors from 33 countries in Europe, Asia and the Middle East. More specifically, 28% of the transaction was allocation to UK/Europe, 28% to Asia, 18% to the Middle East (excluding Saudi Arabia), 17% to Saudi Arabia and 9% to the USA/Other. By investor type, fund managers were allocated 55%, followed by Banks/Private Banks 26%, Agencies/Central Banks 12% and Pension Funds/Insurance Companies 7%. 

Tareq Al Sadhan, the bank’s Chief Executive Officer, commented “We are very proud with the outcome of this transaction, which reflects the confidence international investors placed on Riyad Bank, and more importantly on the Kingdom of Saudi Arabia. Our strategy is fully aligned with Saudi Vision 2030 and we continue to successfully deliver on our strategic objectives”. 

London Stock Exchange is a top Western Centre for global Islamic Finance, with a total of 95 Sukuk bonds raising over $30bn for issuers. London Stock Exchange continues to have a strong relationship with Saudi issuers – the Kingdom of Saudi Arabia lists both their conventional and Sukuk Bonds on London’s markets and the exchange also hosted the debut issuance from Saudi Aramco.

Quick facts

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Market: ISM
Instrument market cap (£m)
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Listing/Admission to trading
25 Feb 2020
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