Saudi Telecom Company (STC), a leading digital enabler in the region, announced a new strategic step: the launch of an international sukuk issuance denominated in US dollars. This announcement underscores the company's strong financial position and its commitment to diversifying funding sources to support its ambitious expansion plans.
Offer details and managing entities
The company clarified in an official statement published on the Saudi Stock Exchange (Tadawul) website that this offering falls under its international sukuk issuance program, which has a total size of US$5 billion. The issuance will be conducted through a special purpose vehicle (SPV) established outside Saudi Arabia specifically for this purpose, reflecting the group's sophisticated financial structure.
STC has appointed a global banking consortium to manage this significant issuance, comprising leading financial institutions: BNP Paribas, Citibank, Dubai Islamic Bank, Emirates NBD, HSBC, the Islamic Corporation for the Development of the Private Sector, Kuwait Finance House, Mashreq Bank, National Bank of Greece, Al Ahli Financial Company, and Standard Chartered Bank. Through this offering, the company is targeting qualified investors in the relevant countries, in accordance with applicable regulations.
Financial terms and timeframe
The company indicated that the final value and terms of the sukuk issuance will be determined based on market conditions and supply and demand. It noted that the subscription period began today and is scheduled to end tomorrow, January 9. Regarding the nominal value, a minimum of US$200,000 has been set, with increments of US$1,000 and multiples thereof. The offering price, yield, and maturity date will be determined later.
Economic and strategic context
This move by STC comes at a time when the Saudi economy is undergoing radical transformations as part of the Kingdom’s Vision 2030, with the company playing a pivotal role as a key digital enabler in the Kingdom and the region. The company’s expansion strategy, which includes investment in digital infrastructure, 5G networks, data centers, and emerging technologies, requires sustained and diversified cash flow.
Turning to international debt markets reflects foreign investors' confidence in the Saudi economy and the financial strength of Saudi Telecom Company. Furthermore, issuing sukuk (Islamic bonds) is an effective tool for attracting a broad range of investors seeking Sharia-compliant investment instruments, a market experiencing rapid growth globally.
Expected impact
The success of this offering is expected to bolster the company's cash flow, enabling it to pursue strategic acquisitions and infrastructure development without straining its internal resources. This issuance also solidifies the position of major Saudi companies in global capital markets and opens doors for more national institutions to access international financing at competitive rates.
