10 May 2016 Guidance Investments subsidiary, Guidance Capital Markets (DIFC) Ltd, closes USD 50 million Sukuk issuance for Al Bayan Group Holding
Kuala Lumpur, 10 May 2016 | One of the first transactions of its kind for private Saudi corporate; US dollar denominated Sukuk through private placement; Second time Guidance and AlBayan have led market, first time in 2013 where Guidance advised AlBayan on RM1 billion Sukuk programme, becoming 1st Malaysian Ringgit Sukuk programme established by a Saudi corporate issuer; Proceeds from previous Malaysian Ringgit Sukuk were used for further expansion of Al Bayan group
A subsidiary of Guidance Investments, the investment management and capital markets arm of Guidance Financial Group, Guidance Capital Markets (DIFC) Ltd (Guidance), announced it had successfully closed a three-year Sukuk issuance for the Saudi Arabian conglomerate, Al Bayan Group Holding Company (Al Bayan).
The USD denominated Sukuk was issued last week through a private placement with three GCC banks, and was led by Guidance, who also acted as financial advisor to Al Bayan. The issuance of this USD dollar denominated Sukuk by Al Bayan is one of the first transactions of its kind, where a private conglomerate in KSA closed a USD dollar Sukuk through a private placement.
This is the second time Guidance and Al Bayan have led the market with a unique Sukuk issuance. In 2013, Guidance advised Al Bayan on the establishment of a 1.0 billion Malaysian Ringgit (RM) Sukuk programme and on a first issuance of RM 200 million Sukuk Wakalah as part of the Al Bayan Holding “Sukuk Programme”. The transaction was the first Malaysian Ringgit Sukuk Programme to be established by a Saudi corporate issuer and the first issuance by a Saudi corporate issuer of Malaysian Ringgit denominated sukuk in the Malaysian debt capital markets.
Dr. Hasnita Hashim, Chief Executive Officer of Guidance Investment, commented on the closure: “We are extremely proud to have advised Al Bayan on this transaction in the GCC. At times where the current economic environment is experiencing turbulence, this closure is a testament to our experience and expertise in advising clients on how to develop innovative financing structures and our personalized approach of working closely with Al Bayan over the years to support their growth and expansion plans.”
She added: “As advisors to Al Bayan, our strategy was to support the expansion of the company’s profile. We have done this through partnering with reputable international and regional banks to enabling Al Bayan to access sophisticated financial instruments and international financial markets which have helped them successfully maintain their AA3 credit rating from RAM Ratings Malaysia. We have also found that GCC banks have an appetite for regional issuers, especially those with a sound business model and diversified revenue streams. The Sukuk also gives investors looking for Shariah-compliant assets in the GCC an ideal solution at a time where the Sukuk market is facing a slowdown”.
Over the years, Al Bayan has moved from bilateral relationships with local and offshore banks, to the issuance of Sukuks in Malaysia in 2013. The proceeds from the Malaysian Ringgit Sukuk were used for further expansion of the group. This recent USD Sukuk comes as a natural step in the company’s financial progression.
As Guidance Investments creates products that meet the Shariah-compliant needs of regional investors, the company has been actively meeting the increased demand for Islamic Finance solutions for investors in the GCC region. Guidance Investments has been a pioneer in creating cutting-edge innovative investment solutions, in which it has developed, structured and raised capital for multiple funds. To date, the company has launched thirteen Shariah-compliant international investment funds in the fields of private equity, real estate, and fixed income, working independently and in partnership with leading international strategic partners.
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