Al Rajhi Bank Sukuk

Investment Banking

Al-Rajhi Capital Company, in its capacity as the financial advisor and Lead Manager on the public offering of Alrajhi Bank Tier 1 Sukuk , announced the successful completion of the offering process and the successful settlement of sukuk, where is the number of subscribers reached more than 125,000 subscriber.

The Issuer
Al Rajhi Bank
Sukuk Issuance
Al Rajhi Banking and Investment Corporation Additional Tier 1 Capital Sukuk
Credit Rating of the Bank
S&P: “BBB+” Positive outlook
Fitch: “A-“ Stable outlook
Moody’s: “A1” Stable outlook
Sukuk Structure
Mudaraba
The Currency
Saudi Riyal
Tenor
Perpetual
Call Date
After 5 years
Annual profit rate
5.5%
The minimum value of subscription
5,000 SR
The nominal value per Sukuk
1,000 SR
Periodic distribution of profits
The profits will be paid on a Quarterly basis
The subscription date
From 30 October to 10 November 2022
Listing
The Sukuk will be listed and traded in Tadawul.
Registrar
Securities Depository Center Company (“Edaa”)
Receiving Entities
Al Rajhi Bank, Riyad Bank, Alinma Bank, Bank Albilad, Arab National Bank, Saudi National Bank, Al Jazira Capital, Saudi Fransi Banque
Key Information about Sukuk
The Issuer Al Rajhi Bank
Sukuk Issuance Al Rajhi Banking and Investment Corporation Additional Tier 1 Capital Sukuk
Credit Rating of the Bank S&P: “BBB+” Positive outlook
Fitch: “A-“ Stable outlook
Moody’s: “A1” Stable outlook
Sukuk Structure Mudaraba
The Currency Saudi Riyal
Tenor Perpetual
Call Date After 5 years
Annual profit rate 5.5%
The minimum value of subscription 5,000 SR
The nominal value per Sukuk 1,000 SR
Periodic distribution of profits The profits will be paid on a Quarterly basis
The subscription date From 30 October to 10 November 2022
Listing The Sukuk will be listed and traded in Tadawul.
Registrar Securities Depository Center Company (“Edaa”)
Receiving Entities Al Rajhi Bank, Riyad Bank, Alinma Bank, Bank Albilad, Arab National Bank, Saudi National Bank, Al Jazira Capital, Saudi Fransi Banque

FAQs



What are Sukuk?
Sukuk are Sharia-compliant securities issued by companies in return for an agreed profit rate that is distributed periodically for the purpose of financing their business and its expansions. At the end of the Sukuk term, which is known by maturity date, the issuer of the Sukuk pays off the principal (the value of Sukuk) raised from investors.
 
What are the advantages of Sukuk?

 

  • Sukuk is a medium-risk investment as it provides protection against the risk of depreciation in the value of the invested funds when compared, for example, to stocks.
  • Periodic fixed income.
  • Less volatility compared to stocks.
 
Where will the proceeds of the issuance of the Sukuk be directed to?
These amounts will be used by the issuer to enhance its capital, and it is also used for the general purposes of the bank.
 
What are Additional Tier 1 Capital Sukuk?
They are non-temporary (perpetual) and callable securities issued by financial institutions, with which the institution raises its supervisory capital, to be able to expand its business. Although Sukuk holders may be subject to higher risks than holders of secondary obligations (ordinary debts)
 
What are the Zakat implications and eligibility of profits for the investors in these Sukuk?
Additional Tier Capital 1 Sukuk is a debt instrument with very similar characteristics to an equity instrument (e.g., common stock of joint stock companies). Therefore, investors are not required to pay Zakat because the bank will classify it as equity. Moreover, the investors of Additional Tier 1 Sukuk have preference over the shareholders of common stocks in respect of dividend distribution. However, their preference is not higher than the preference of other creditors.
 
What is the Call Date?
The issuer of the Sukuk has the right after a specified period (provided that it is before the maturity date) to redeem the Sukuk by paying the capital subscribed by the investors.
 
What is Mudaraba structure?
It is a partnership contract between two parties, which requires the payment of a particular amount of money from one party to another for trading purpose, and they will share the profits based on what agreed upon.
 
What are the categories that are entitled to subscribe to the Sukuk?
All categories are entitled to subscribe to the Sukuk
 
Can dependents subscribe?
Yes, individuals can subscribe for their dependents
 
Will Sukuk Listed in Tadawul?
Yes, the Sukuk will be listed in Tadawul, and they can be traded in financial market by individual and corporate investors.
 

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