SHB, Taajeer Sign Deal for Sukuk Issue - KSA

Taajeer Company for Vehicles, Equipment and Real Estate yesterday announced the successful closing of its debut Islamic sukuk issue.

The sukuk, which was issued as an exempt offer under Capital Market Authority regulations, attracted 50 percent more subscriptions than SR250 million Taajeer had decided to raise. The sukuk is based on a floating rate note (FRN) with a tenure of five years.

"The investors will receive a return of Saudi interbank offered rate (SIBOR) plus 2.5 percent biennially," Tajeer Chairman Saleh J. Malaikah, said at the signing ceremony for the Taajeer sukuk held at the Saudi Hollandi Bank (SHB) regional head office here yesterday. "The principal investment amount will be paid on maturity in 2012," he added.

Participating in the signing ceremony was Malaikah, together with Taajeer CEO Omar Hindi, Saudi Hollandi Capital CEO Tahir M. Al-Dabbagh and Kamal Mian, SHB's head of Islamic banking.

Taajeer sukuk is described as the first Saudi riyal denominated Islamic sukuk issue by a private company in the Saudi market. SHB acted as the sole lead manager and book runner. The senior management of Taajeer conducted investor meetings in Riyadh, Dammam and Jeddah to present the company performance and sukuk investment opportunity.