The Saudi Electricity Company (SEC) has successfully managed to price and allocate two global bonds (sukuk) worth $2.5 billion (SR9.37 billion), Saudi Press Agency said.
The bonds were reportedly issued in two separate tranches: The first is a $1.5 billion 10-year bond at a rate of 4 percent and the second is a $1 billion 30-year note at 5.5 percent, the agency said.
Earlier, the Deutsche Bank, HSBC and JPMorgan were selected as book runners to receive offers of potential global investors.
On March 24, SEC launched a series of meetings with investors in Europe and the United States where the pricing guidance was set at 4.25 percent-4.375 percent on the shorter tranche and 5.625 percent-5.75 percent on the longer one, the agency added.
Subscription to the bonds reached $12.5 billion, or five times of the required fund, according to the agency.
Bonds issued by SEC have always gained enormous acceptance from investors in the United States, notably long-term bonds.
Investors of the United States and the Middle East have captured the biggest portion of the 30-year bonds at 31 percent and 30 percent, respectively, whereas European and Asian investors got 20 percent and 19 percent, respectively, the agency said.
On the other hand, the 10-year bonds attracted more investors from the Middle East and Europe at 34 percent and 23 percent, respectively, followed by investors from international financial institutions, Asia and the United States at 17 percent, 16 percent and 10 percent, respectively, the report said.
SEC, a 74.30 percent government-owned entity, is engaged in generating and distributing electricity power supply in the Kingdom directly or through its wholly or partially owned subsidiaries. It plans to spend $80 billion over the next 10 years to meet Saudi Arabia’s rising demand for electricity.
The government has already announced plans to invest SR408.75 billion to produce 41GW of solar energy by 2032.