SABIC gains approval from CMA for Islamic Sukuk

06-Jul-06

SABIC has received approval from the Saudi Capital Market Authority (CMA) to launch issuance of Sukuk up to SAR 3 billion, making it the first to be launched in Saudi Arabia under the new Capital Market Law. The minimum value set for each of these Sukuk is SR 50,000. The minimum subscription shall be SR 500,000 (10 Sukuk per subscriber). If the amount is greater than SR 500,000, it will be calculated in multiples of SR 50,000. The Sukuk will also be the first to be admitted on the official list of the CMA, the first fully tradable Sukuk to be issued in the Kingdom, and the first to be settled/cleared through Tadawul (Saudi Stock Exchange). HSBC Group has been appointed as the lead manager and book runner for this pioneering issuance. Initially, issuance shall be limited to financial institutions and major companies. Individuals may participate through various bank investment funds. Other issuances will expand to cover individuals directly following completion of essential mechanisms of the component authorities. To be issued directly by SABIC, the SABIC Sukuk will be the first to be approved by a Shariah Committee of a Saudi Arabian Bank, the SABB Amanah Shariah Supervisory Committee.