HSBC Saudi Arabia acted as the Arranger and Dealer on the establishment of ACWA Power’s SAR 5 Billion Sukuk Program as well as a Lead Manager, Bookrunner, Sukukholders’ Agent and Payment Administrator on the senior unsecured Sukuk issuance of SAR 2.8 Billion, which settled on 14 June 2021. This was ACWA Power’s first Sukuk issuance in the Saudi debt capital market and the local investors submitted bids in excess of SAR 5 Billion, which lead to the issue being 1.8 times oversubscribed.
HSBC Saudi Arabia was able to capitalize on the exceptionally strong investor demand by advising ACWA Power to print a relatively longer tenor Sukuk of 7 years at a final pricing of SIBOR + 1.00% pa. The final pricing not only represented the tightest end of the initial pricing range offered to investors, but also the lowest ever senior unsecured Sukuk pricing achieved by a corporate or bank issuer in the local market since 2017.
“We are committed to the development of the local debt capital market in line with Saudi Arabia’s Financial Sector Development Program and are proud to have partnered with a national champion like ACWA Power by introducing them to a growing and increasingly sophisticated local fixed income investor base and further strengthening our position in Saudi debt capital markets” says Faris Alghannam, Deputy CEO of HSBC Saudi Arabia.
“The success of ACWA Power’s maiden Sukuk issuance both in terms of pricing and order book demonstrates the strength and efficacy of our funding strategy. With HSBC Saudi Arabia acting as one of the Lead Managers, we had an experienced partner in the domestic debt capital markets by our side, which has allowed us to achieve exceptional results. The robust investor demand is indeed a significant testament of our mission to reliably and responsibly deliver power and desalinated water to communities worldwide.” said Rajit Nanda, Chief Portfolio Management Officer and Acting Chief Investment Officer at ACWA Power.