Arabian Centres launches $650 million 5.5-year sukuk to yield 5 5/8%

By Rebecca Melvin

Concord, N.H., April 1 – Arabian Centres Co. launched a $650 million 5.5-year Islamic bond, or sukuk, (expected rating: Ba2) at a yield of 5 5/8% on Tuesday, according to market sources.

Pricing was tightened from initial guidance for a 5 7/8% yield.

Order books were in excess of $1.35 billion at the time the deal launched. Further information on pricing of the bond was not available on Thursday.

Arabian Centres Sukuk II Ltd. was the issuer of the sukuk, and proceeds are expected to be used to refinance a portion of the company’s secured debt under its existing secured Murabaha and Ijara facilities and repay $200 million drawn under its revolving credit facility. The remaining cash will be kept on the balance sheet to finance future capital spending, according to Moody’s Investors Service.

Credit Suisse, Goldman Sachs, HSBC, Albilad Investment, JPMorgan, Jamco Invest and Warba Bank were bookrunners of the deal, according to a source.

The shopping centers company is based in Saudi Arabia.

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