Alinma Bank Records 34.5% Profit Growth, Achieving 4,839 Million Riyals in 2023

Alinma Bank Records 34.5% Profit Growth, Achieving 4,839 Million Riyals in 2023

RIYADH, March 1, 2024 – Alinma Bank has concluded a landmark USD $1 billion, perpetual, non-call, 5.5 year, Sukuk issuance in the international debt capital markets. It also stands as the first AT1 Sukuk to conclude in 2024 in the Kingdom.

 

The Sukuk’s subscription was oversubscribed by a factor of 4.5, with an extremely strong reception from international investors. The USD $4.5 billion orderbook was the largest orderbook received for any financial institution transaction from the MENA region in 2024, indicating the strength of Alinma’s Tier 1 capital adequacy and overall credit worthiness.

 

The profit rate for the transaction was tightened by 50 bps to 6.500% during the book building process in light of demand. The profit rate equates to an issue/reset spread of interpolated U.S. Treasury (UST) +220 bps above UST, which represents one of the lowest spreads for a U.S. dollar-denominated perpetual issuance in the GCC in the past 5 years.

 

Speaking about the issuance, Alinma Bank CEO, Mr. Abdullah Ali Al-Khalifa, emphasized the importance of the deal for Alinma, the Kingdom, and the broader region.  Said A-Khalifa: “This is the first Sukuk issuance for Alinma in the international marketspace, and we couldn’t be more pleased with the result. Additionally, it is the first AT1 issuance from the MENA region in 2024, the first USD Reg S AT1 since Feb 2022 from KSA, and the largest⁠ MENA AT1 issuance in 3 years.  We are heartened by the strong demand for a Shariah-compliant issuance among foreign investors, and hope that it will pave the way for further foreign demand in the Saudi market.”

 

Deal highlights included:

- ⁠Upsized transaction value moving from an initial size expectation of USD $750 million to the final USD $1 billion value

- An astute pricing strategy starting initial price talk at 7.000% and tightened 50 bps to 6.500%, marketing one of the largest price tightening moves seen in years

- Brisk demand and strong investor participation, with the orderbook peaking at above USD $4.5 billion, representing an oversubscription rate of 4.5x.