GIB Capital, a leading merchant bank based in Bahrain, has joined hands with Saudi bank Riyad Capital to successfully close a SR500 million ($133.3 million) Islamic bond for Ajil Financial Services Company.

GIB Capital was established in 2008 as a fully-owned subsidiary of Gulf International Bank to carry out investment activities within Saudi Arabia and is duly authorised by the CMA.

GIB Capital acted as the joint lead manager and joint bookrunner for the bond issued by Ajil Cayman - a limited liability special-purpose company incorporated in the Cayman Islands.

The inaugural sukuk has a three-year tenor with an amortising structure and pays a coupon of three-month Sibor plus 80 basis points quarterly. The sukuk was issued at par.

Srinivas Vemparala, the chief executive officer of GIB Capital, said, "We are pleased to have assisted Ajil in arranging their debut sukuk. This ‘off balance sheet’ sukuk is an innovative structure incorporating a credit wrap in the form of a purchase undertaking from GIB and Riyad Bank."

"The underlying creditworthiness of the structure along with the credit enhancement provided by the purchase undertaking received a very positive response from investors," he stated.

"The issue was oversubscribed and priced at the lowest margin achieved by a non-governmental issuer in the Saudi Riyal market since 2008," he stated.

The success of this transaction demonstrates GIB Capital’s debt capital markets structuring and placement expertise, and we are confident that this Sukuk will set up a benchmark for Ajil for their future issuances.”-TradeArabia News Service