(Source: Middle East Company News)
Allen & Overy LLP and its affiliated office in Riyadh, Abdulaziz AlGasim Law Firm, have advised Saudi Electricity Company (SEC) on the issuance of a SAR7bn ($1.87bn) sukuk, the largest sukuk issue globally to date in 2009 and the first public issuance of 2009 in Saudi Arabia.
The deal involves the transfer by SEC of a portfolio of assets to a custodian, Sukuk Electricity Company, a wholly-owned subsidiary of SEC.
The asset portfolio comprises the rights granted to SEC under a Saudi Arabian Council of Ministers Resolution to provide electrical service connections and to levy and receive a one-time charge for each connection. HSBC Saudi Arabia Limited and Samba Capital were joint lead managers on the deal, with the securities receiving an 'AA-' rating from Fitch.
Proceeds raised through the issue will be used by SEC, in part, to fund an investment programme designed to expand its generation capacity and enhance the efficiency of SEC's transmission grid.
Commenting, London-based senior associate Atif Hanif, who also advised on SEC's first sukuk issuance in 2007, said: "This is the largest sukuk issue globally this year, and it is unsurprising that it has come from Saudi Arabia. The domestic Saudi market still has a relatively healthy pool of liquidity and investors willing to deploy it for investment-grade issuers like SEC."
Zeyad Khoshaim, partner at Abdulaziz AlGasim Law Firm said: "This is a landmark deal for the Saudi market and a much needed boost for the regional debt capital markets. We expect the Saudi capital markets to receive a further boost this year with the establishment of a sukuk and bond trading platform by the Saudi Capital Markets Authority to facilitate issuance, improve transparency and enhance market liquidity."
Allen & Overy fielded a multi-jurisdictional team for this deal, spanning both London and Riyadh. The team was led by senior associate Atif Hanif in London and partner Zeyad Khoshaim in Riyadh, assisted by associates Jonathan Marshall and Ahmed Al Bassam (Riyadh). Allen & Overy partners, Roger Wedderburn-Day (London) and Julian Johansen (Riyadh) also advised.
For further information please contact Caroline Livesey, in London on +44 20 3088 4380.
(c) 2009 Middle East Company News. Provided by ProQuest LLC. All rights Reserved.
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