SABIC set to launch its first Sukuk in Saudi market lead managed by HSBC Saudi Arabia Limited

Monday, 17 July 2006 is the last date for investors to put in orders, but the order book has shown strong momentum given significant interest in this new instrument.

"This will be a first for SABIC and a proud first for HSBC in the Kingdom," says Rajiv Shukla, from, HSBC Saudi Arabia Limited. "The SABIC Sukuk intends to harness SABIC's renowned financial strength inject further depth into the domestic capital markets. We are thankful particularly to the CMA as well as to various government departments and SABIC itself for their support in launching this new breed issue that adds a valuable component to the domestic capital market which itself is facilitating innovation and economic growth in the Kingdom."

To be issued directly by SABIC, the Sukuk will be the first to be approved by a Shariah Committee of a Saudi Arabian Bank, the respected SABB Amanah Shariah Supervisory Committee. "This Sukuk structure is unique in many ways says Hissam Kamal of HSBC Amanah from HSBC Saudi Arabia Limited. "The Sukuk is directly underpinned by a real business activity, is fully tradable and provides for structured returns satisfying the institutional need for this important Shariah-based asset class, hopefully paving the way for more such issuances from other leading companies", adds Mr Kamal. The issue is also set to be the first to be admitted to CMA's Official List and to be settled/cleared through Tadawul.

Together, HSBC Saudi Arabia Limited and SABIC will ensure that the issuance and offering meets the highest international standards of capital market practices and is compliant with local capital markets requirements.

Mr Shukla also highlights how the SABIC Sukuk, while tailored for institutional investors, will ultimately benefit the broader community: "This innovative issue will positively impact the capital markets, as it will provide an ideal opportunity for investment institutions to diversify their portfolios and offer sound investment options to their retail clients."