Almarai Company (“Almarai”, the “Company”, ISE) yesterday, 26 February 2019, priced its debut international capital markets offering through a Sukuk in the aggregate principal amount of USD500 million due March 2024 with a profit rate of 4.311% (the “Sukuk”).
Almarai’s debut offering represents the first USD denominated Sukuk by a GCC food and beverage company, the first international investment grade non-government related corporate issuance from Saudi and the largest orderbook oversubscription ever achieved by a Saudi corporate. Almarai also achieved outstanding orderbook diversification with over 60% distribution of the Sukuk to non-Middle Eastern investors reflecting the strength of the credit story.
Following a comprehensive global investor roadshow spanning the Hong Kong, Singapore, United Arab Emirates, and United Kingdom, between 21 – 25 February 2019, the Company priced the offering in an intraday execution, supported by overwhelming investor interest reflected in over 10x orderbook oversubscription from investors across the globe.
The strong investor interest also allowed the company to significantly tighten pricing from Initial Price Thoughts of 225bps over Mid-Swaps to a final pricing of 180bps over Mid-Swaps, reflecting a 45bps compression.
Almarai is the Middle East’s leading food and beverage manufacturer and distributor, and the world’s largest vertically integrated dairy company. The company is listed on Tadawul and as at 31 December 2018, it had a market capitalisation of USD 13bn.
The Sukuk have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold within the United States except in accordance with Regulation S under the Securities Act (“Regulation S”) or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The offering is expected to close on 05 March 2019, subject to customary closing conditions.
First Abu Dhabi Bank and HSBC are acting as Joint Global Coordinators on the offering. First Abu Dhabi Bank, Gulf International Bank, HSBC, JP Morgan and Standard Chartered Bank are acting as Joint Lead Managers and Joint Bookrunners.
The Sukuk are expected, on the closing date, to be rated “Baa3” by Moody’s and “BBB-” by S&P. Stabilisation FCA/ICMA