Saudi Telecom Company raised $1.25 billion (Dh4.6bn) through the sale Sharia-compliant bonds, as the biggest telecommunications operator in the kingdom by market value looks to diversify its finances and invest in growth plans.
The 10-year Islamic bonds pay 3.89 per cent annual return. The US dollar-denominated sukuk sale is the first issuance of a $5 billion debt programme set up earlier this year, the company said in a bourse filing to Tadawul stock exchange, where its shares are traded.
“The certificates may be subject to early redemption” at the discretion of STC Sukuk Company, the telecoms operator said, without providing further details of the transaction.
HSBC, JP Morgan Securities, Standard Chartered, Samba Capital & Investment Management, First Abu Dhabi Bank and KFH Capital Investment advised STC on the sukuk sale.
A number of sovereigns, government-related entities, financial institutions and private companies from across the region have tapped the debt capital markets this year following the US Federal Reserve’s dovish stance on interest rate hikes. Saudi Aramco, the biggest oil producing company in the world, received more than $100bn of bids in order book for its $12bn debut international bond offering.
Potential fundraising by STC will help shore up the company’s finances and build an international presence in debt capital markets through the programme, enhancing the company's financial standing in the investor community, the company said in a March statement.
“The aim of the sukuk programme is to support the execution of the company’s strategy and future plans,” it said at the time. “It will help the company to diversify the sources of funding and benefit from the features of the international debt capital market in terms of liquidity, competitive pricing and diversification of investors’ base.”
