SABIC offers debut SAR 3 Billion sukuk with signing of key documents and underwriting agreement

The underwriting agreement was signed with the Lead Manager, HSBC Saudi Arabia Limited ("HSBC"), and a group of Co-Managers that included Banque Saudi Fransi, Gulf International Bank, National Commercial Bank, Samba Financial Group, Saudi Hollandi Bank, and The Saudi British Bank ("SABB"). HSBC is also acting as the Sukukholders' Agent, while SABB Amanah of SABB is the Shariah Coordinator and SABB is the Payments Administrator for this landmark transaction. The offering, which was open only to Saudi Arabian investors, proved to be a tremendous success and attracted orders from a diverse base of investors. Based on the final allocation, 49% of the SAR 3 billion was allotted to pension, mutual & other funds, 15% to Corporates & Institutions, and 36% to Banks in Saudi Arabia.

Mr. Mohamed Al-Mady, SABIC Vice Chairman and Chief Executive Officer said,

"With this debut issuance, SABIC is pleased to have led the way in opening up the non-equity capital market sector in the Kingdom. We are gratified that we were able to achieve our key objectives with this transaction, namely further development of the Kingdom's capital markets and providing investors with greater investment choice, and the first step in diversification of our funding sources."

Mr. Mutlaq H. Al-Morished, SABIC Vice President, Corporate Finance, said, "The issuance in a Sukuk format also demonstrates SABIC's continuing commitment to promote and lead Islamic financing. The participation of a diverse investor base within the Kingdom reflects the confidence in SABIC and its growth prospects. Such confidence was also evident in the substantial oversubscription in the offering, resulting in scaling down in allotments despite issuing at the maximum approved amount of SAR 3 billion."

Mr. Timothy Gray, Chief Executive Officer of HSBC Saudi Arabia Limited said, "We are delighted to have assisted SABIC in this landmark issuance. This transaction further underscores HSBC's leadership and drive in capital markets innovation. The transaction is also testimony to HSBC's key strengths in structuring complex transactions and offering clients Islamic finance solutions. We are grateful to SABIC for having given HSBC this opportunity to structure and lead the transaction, and to the Capital Market Authority and Tadawul for their support for this innovative and first-time issuance."

The transaction achieved a number of firsts:
• The largest-ever corporate Sukuk issuance in the region
• The first public Sukuk/bond in Saudi Arabia, and the first to be admitted to CMA's Official List.
• The first capital market transaction to be approved under a bookbuilding format in Saudi Arabia
• The first publicly tradeable Sukuk/bond in KSA, and the first to be cleared/settled through Tadawul
• The first Sukuk to be approved by a Shariah committee of a Saudi Arabian bank for public offer in KSA

The settlement date for the Sukuk has been fixed for 29th July 2006, and the Sukuk is expected to begin trading a few days thereafter.