Sadara Chemical raises US$2 bln from sale of Islamic bond to fund petrochemical complex

04-Apr-13

Sadara Chemical Co, a joint venture between Saudi Aramco and Dow Chemical, raised SAR7.5 billion (US$2 bln) from the sale of an Islamic bond to fund a large petrochemical complex. The Islamic bond (sukuk) which has a lifespan of 16 years, was priced at 95 basis points over the six-month Saudi interbank offered rate (Saibor). The sale is part of a US$12.5 bln debt to fund the construction of the project, which will produce more than 3 mln tons of petrochemicals each year when completed in 2016. The US$19.3 bln facility, located at Jubail Industrial City in Saudi Arabia’s Eastern Province, will be the world’s largest chemical complex ever built in a single phase. Strong demand from investors in Saudi Arabia resulted in an increase in size of sukuk from the original target of SAR5.25 billion, which was covered 2.6-times. Deutsche Bank, Riyad Bank, Alinma Bank and Bank Al Bilad arranged the sukuk.