Saudi Arabian tanker giant Bahri has tapped domestic bond markets with the issuance of a Saudi Riyals denominated Sukuk bonds worth SAR3.9bn ($1.04bn).
The Riyadh-based tanker owner said the proceeds from the fundraiser would be used to refinance an existing SAR 3.9bn Sukuk maturing in July 2022.
The seven-year senior unsecured Sukuk bonds were issued by way of a private placement offer at a floating profit rate of 120 basis points above the six-month Saudi Arabian Interbank Offered Rate (SAIBOR).
Bahri said the fundraiser, which was open to Saudi institutional and qualified investors, was oversubscribed by nearly two times.
“This strategic transaction represents a key milestone for Bahri and highlights the confidence investors have placed in the company,” said Bahri chief executive Ahmed Ali Alsubaey.
He added that it also complements one of the objectives of the financial sector development program under the Saudi Vision 2030 to develop and deepen the capital markets in Saudi Arabia.
“Despite the adverse market environment, Bahri’s Sukuk achieved almost two times oversubscription and was able to diversify away from bank investors, and as a result, strengthened the quality of the order book by allocating a significant amount of the funds raised to asset managers, pension funds, and corporate investors,” said Bahri chief financial officer Fayez Al-Asmari.
“This excellent outcome not only exceeds expectations, but also sends a positive note to investors and creditors that Bahri’s credit history is valued and endorsed by the investor community.”
The joint lead managers of the transaction were SNB Capital, Al Rajhi Capital, and HSBC Saudi Arabia. The lead coordinator was HSBC Saudi Arabia, which also acted as Sukuk holders’ and payment agent.
Bahri owns a fleet of 42 VLCCs, as well as 36 chemical and product tankers, nine 81,000-dwt bulkers and six multi-purpose vessels, according to its website.
On Tuesday, TradeWinds reported that Bahri was in expansion mode with a long-anticipated move into the LR2 product tanker segment.
The company also said it was looking to return to the VLCC time-charter market and was looking to fix one or two vessels on charters lasting one, three or five years, but is open to fixing more should it deem the rates being offered as acceptable.
