The Saudi Electricity Company (SEC), a leading energy company in the Kingdom, announced a significant financial milestone with the successful completion of its international sukuk issuance, divided into three tranches, totaling US$2.4 billion. This announcement marks the culmination of its international sukuk issuance program, featuring varying maturities of 3, 6, and 10 years, reflecting international investors' confidence in the company's financial strength and the future of the Saudi economy.
Details of the segments and financial returns
According to the official statement issued by the company on the "Saudi Stock Exchange" website, the financial structure of the offering was detailed precisely to meet the aspirations of different segments of investors, as follows:
- The first tranche: worth $500 million, consisting of 2,500 bonds, with a maturity period of 3 years, and a fixed annual return of 4.310%.
- The second tranche: worth $700 million, consisting of 3,500 bonds, with a maturity period of 6 years, and a fixed annual return of 4.518%.
- The third tranche: It is the largest in size, with a value of $1.2 billion, and consists of 6,000 bonds, with a maturity period of up to 10 years, and a fixed annual return of 5.065%.
The nominal value of each instrument is $200,000, with the possibility of redeeming the instruments before the maturity date according to specific cases explained in the basic issuance prospectus.
Economic importance and strategic context
This offering is of particular importance beyond simply providing liquidity; it serves as a strong indicator of the attractiveness of Saudi debt instruments in global markets. The success of Saudi Electricity Company in securing the subscription for this major offering on the London Stock Exchange enhances the standing of leading national companies in international markets and underscores the robust credit rating of the Kingdom and its vital companies.
This move aligns with the economic momentum in Saudi Arabia, where major companies are seeking to diversify their funding sources to support large-scale infrastructure projects. The Saudi Electricity Company plays a pivotal role in supporting industrial and urban development, making the sustainability of its cash flow vital for the continued development of the electricity grid and the improvement of energy efficiency.
Alignment with the Kingdom's Vision 2030
This issuance falls within the broader context of Saudi Vision 2030, which aims to develop the financial sector and deepen the debt market. By accessing international markets and listing the sukuk on the London Stock Exchange, the company is contributing to integrating the local economy with the global economy and attracting foreign capital. Furthermore, the adoption of sukuk as an Islamic financing instrument strengthens the Kingdom's position as a global hub for Islamic finance.
It is worth noting that the bonds will be sold and delivered outside the United States under Regulation S of the US Securities Act, targeting qualified investors inside and outside the Kingdom, thus expanding the investor base and reducing the risk of financial concentration.
