Dar Al-Arkan sukuk listed on BSE

MENAFN - Arab News) One of the largest Islamic bonds, a $1-billion-sukuk al-Ijara of a Saudi-based Dar Al-Arkan International Sukuk Company, was listed on the Bahrain Stock Exchange (BSE) yesterday, marking the first Saudi sukuk and the largest ever issue to be listed on the BSE.

This was announced at a listing ceremony took place at Sheraton Towers and attended by the Director BSE Fouad Abdul Rahman Rashid and Abdullatif Al-Shalash, managing director and board member of Dar Al-Arkan. With this latest listing the total outstanding worth of sukuks listed on the BSE reached the $3.2-billion mark.

The sukuk has also been listed on the Dubai International Financial Exchange (DIFX) and Malaysia's Labuan International Financial Exchange (LFX).

Successfully closed in July 2007, the landmark five-year sukuk issue, based on an Ijara structure, will mature in 2012 and pays an annual return of 2.25 per cent above LIBOR payable to the Sukuk holder every three months.

It is the second Sukuk to be issued by Dar Al-Arkan Real Estate Development Company (Dar Al-Arkan), a leading residential real estate developer in Saudi Arabia.

In March 2007, the company closed its inaugural Sukuk at $600 million, marking the first Sukuk to be issued by a Saudi corporate in the international capital markets.

The inaugural Dar Al-Arkan Sukuk is listed on the DIFX.

Fouad Abdul Rahman Rashid said: "This is truly a landmark event in the history of the BSE and represents a further important milestone in the development of the Islamic capital markets.

We look forward to continuing to work with the region's leading corporates and financial institutions to expand the boundaries of the Islamic finance industry."

Abdullatif Al-Shalash said: "We are delighted to have the opportunity to list our second Sukuk issue on the Bahrain Stock Exchange.

The truly international nature of this Sukuk and the overwhelming response from investors affirms the strength of Dar Al-Arkan's business model, our strong growth prospects and the confidence of the international financial community in our strategy.

Dar Al-Arkan is committed to playing a leading role in providing affordable housing solutions that meet international standards for middle income families across the Kingdom of Saudi Arabia."

Dar Al-Arkan recently announced the successful close of its initial public offering (IPO) on the Saudi Tadawul All Share Index which saw the company's founding shareholders dilute their existing shareholding by 11.01 percent, equal to a total of 59.45 million shares.

The initial public offering was largest non-governmental listing in Saudi history and was significantly oversubscribed, attracting a great deal of interest from a wide spectrum of investors.

The individual applicants' allocation was oversubscribed by 209 percent and the institutional and funds allocation was oversubscribed by 515 percent, with an overall oversubscription of 423 percent.

The shares were listed and began trading within the services sector on the 29th of December 2007.