The subordinated Islamic bond, which boosts Tier 2 supplementary capital, has a 10-year lifespan and includes an option for the bank to buy back the paper after five years, a statement to the Saudi bourse said.
Pricing of the instrument was at 145 basis points over the six-month Saudi interbank offered rate (Saibor), said a report in the
The offering will support the bank's capital base in accordance with Basel III requirements, assist its future growth and diversify funding sources.
Saib, the kingdom's eighth-largest lender by assets, is the latest bank in Saudi Arabia to issue a capital-boosting sukuk.
While lenders in the kingdom have high capital ratios compared with Western banks, thanks to the regulator's conservative stance, a period of sustained lending growth has led many banks to sell such instruments to strengthen their reserves. -
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