BSE welcomes first US$1 billion sukuk

by Daniel Stanton on Wednesday, 13 February 2008

The Bahrain Stock Exchange (BSE) has listed its first billion-dollar sukuk, it was announced on Wednesday.

Saudi Arabian real estate developer Dar Al Arkan is the issuer of the Islamic bond, which is also the first Saudi sukuk to list in Bahrain.

The US$1 bn sukuk al-ijara was issued by Dar Al Arkan International Sukuk Company, a special purpose vehicle based in the Cayman Islands.

Fouad Abdul Rahman Rashid, director of the BSE, 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."

The five-year sukuk was closed in July 2007, and has already been listed on the Dubai International Financial Exchange (DIFX) and Malaysia's Labuan International Financial Exchange (LFX).

Sukuk holders receive an annual return of 2.25% above LIBOR, payable every three months.

This is Dar Al Arkan's second sukuk issue, following its $600m issue in March 2007, which was listed on the DIFX.

Dar Al Arkan recently completed its initial public offering (IPO) on the Saudi Stock Exchange, the largest non-governmental listing in the history of the Tadawul. The shares began trading on December 29.