Riyad Bank announced the launch of a Tier 2 sustainable debt instrument denominated in US dollars, under its international medium-term debt program. This announcement represents a strategic step that strengthens the bank's position in international financial markets and supports its focus on sustainable financing.
Offering details and timeline
The bank clarified in an official statement published on the Saudi Stock Exchange (Tadawul) website that the offering process began today, January 7, and is scheduled to end tomorrow, Thursday. The statement indicated that the final issuance size and offering terms will be determined based on market conditions and investor demand. This issuance targets qualified investors both within and outside the Kingdom of Saudi Arabia, reflecting the bank's desire to diversify its investor base and attract foreign capital.
Underwriters and participating financial institutions
To ensure the success of this international offering, Riyad Bank appointed a strong consortium of global and regional banks and financial institutions to manage the subscription. The list includes: First Abu Dhabi Bank, BBVA, DBS Bank, Emirates NBD Capital, HSBC, Merrill Lynch Saudi Arabia, Mizuho International, Riyad Capital, SMBC International, and Standard Chartered Bank.
Financial terms and issuance structure
Regarding the financial details, the bank has set the minimum subscription amount at US$200,000, with the possibility of increasing increments of US$1,000. These instruments have a 10-year maturity, but include an option allowing the bank to redeem them after 5 years, according to the terms detailed in the underlying offering document. The offering price and expected yield will be determined based on market supply and demand at the time of closing.
The economic context and the importance of sustainable finance
This offering is particularly significant as it falls under the umbrella of "sustainable debt instruments," which aligns directly with the goals of Saudi Vision 2030 and the Saudi Green Initiative, both of which encourage the financial sector to adopt environmental, social, and governance (ESG) practices. The trend among Saudi banks to issue green or sustainable debt instruments reflects a growing commitment to supporting environmentally friendly projects and sustainable development.
Furthermore, issuing Tier 2 debt instruments is an effective way to enhance the bank's capital adequacy ratio in accordance with Basel III requirements, giving it greater flexibility to expand its lending operations and finance the major projects currently underway in the Kingdom. Accessing international dollar-denominated debt markets also helps diversify funding sources and reduce overall reliance on domestic liquidity, while capitalizing on international investors' appetite for Saudi assets with strong credit ratings.
