Saudi Arabia Selling Bonds

Saudi Arabia has started marketing US dollar-denominated sukuk, or Islamic bonds, with the issue expected to be around $2 billion in size, a document showed on Wednesday, Reuters reported .It would be the kingdom’s second international sale of sukuk after a $9 billion transaction last year. The exercise completes Saudi Arabia’s external funding requirements for 2018, according to the document. The kingdom, acting through the ministry of finance, started marketing the notes with an initial price guidance of around 145 basis points over mid-swaps. Citi, HSBC and JPMorgan are coordinating the transaction, and are joint lead managers with BNP Paribas, Mizuho and Samba Capital. The structure of the sukuk is the same adopted for the 2017 issue, comprising a mudaraba agreement, a form of Islamic investment management partnership, plus a murabaha facility that would trade commodities with a special purpose vehicle. The marketing exercise comes a day after sources told Reuters that Saudi Arabia was planning to issue a new dollar sukuk shortly.