Banking

Riyad Bank plans sustainability-linked AT1 sukuk

Riyad Bank (1010.SE), which is 43% indirectly owned by the Saudi government, has hired banks for a planned issuance of U.S. dollar-denominated Additional Tier 1 (AT1) sukuk to support its capital base and meet financial and strategic needs, the lender said on Monday.

HSBC (HSBA.L), Riyad Capital and Standard Chartered (STAN.L) will arrange investor meetings ahead of the planned debt sale, Riyad Bank said.

Additional Tier 1 bonds, the riskiest debt instruments banks can issue, are designed to be perpetual but issuers can redeem them after a specified period.

The AT1 sukuk will be sustainability-linked and non-callable for five and a half years, a bank document reviewed by Reuters showed. BofA Securities (BAC.N) is also on the deal, the document showed.

The banks will arrange a global investor conference call on Monday, as well as other fixed income investor calls, the document said.

An issuance of benchmark size – typically at least $500 million – will follow, subject to market conditions.

“The amount and terms of offer of the Sukuk will be determined subject to the market conditions,” Riyad Bank said in a stock exchange filing. Reporting by Yousef Saba, Editing by Louise Heavens

This article was originally published by Reuters.

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