RIYADH: Saudi Arabia’s Acwa Power successfully raised 2.8 billion Saudi riyals ($746 million) through the issuance of a 7-year sukuk, or Islamic bond, as the company continues to diversify its sources of funding to support its growth.
The issuance was the first the company has completed in the Saudi Arabian market and benefited from “significant interest from fund managers, government funds and insurance companies”, the company said in a statement on Monday evening. The offer was 1.8-times oversubscribed, report agencies.“The success of the issuance is proof of the wider market’s faith in KSA’s bond market and Acwa Power’s strong credit fundamentals, which have attracted a diverse pool of sophisticated investors,” Paddy Padmanathan, president and chief executive of Acwa Power, said. “The issuance is also a vote of confidence from investors in our ability to capture large opportunities in Saudi Arabia and other growth markets.”
Companies in the Gulf have been taking advantage of low rates to raise debt as the region emerges from an economic downturn caused by the Covid-19 pandemic and last year’s oil price plunge. Emerging markets specialist Franklin Templeton said this week it expects debt market issuance in the Gulf this year to be in line with last year’s total of $250bn, but for a greater proportion of this to be issued by the corporate sector.