The Saudi BinLadin Group, one of the leading contractors in the region, said it has repaid its short term SR700 million ($186.6 million) Islamic bond in full at maturity on April 12.

The sukuk, settled through Tadawul, was originally issued on July 2010 and was the first short-term one ever in the Saudi market, said a statement from the Saudi builder.

This short term Sukuk, which was solely led by HSBC Saudi Arabia Limited, attracted strong demand from the market and was more than 2.5 times oversubscribed.

The innovative instrument balances well the short funding needs of Saudi corporate issuers while offering an attractive yield pick up to Saudi investors, it added.  

The company in a statement thanked the Kingdom's Capital Markets Authority and Tadawul for the strong support and guidance provided in introducing such a short term instrument to the Saudi debt capital markets.

'Short term sukuks have the potential to play a significant role in attracting Saudi investor funds to support key infrastructural projects. It provides an excellent opportunity to both investors seeking good quality investment opportunities and issuers seeking diversified liquidity sources,' the company said.

The smooth and efficient settlement of the Sukuk Al-Murabaha on April 12 is a testimony to the continuing development and efficiency of debt capital markets in Saudi Arabia and The Saudi Bin Ladin Group is privileged to be a part of this landmark event,' the company statement added.

Walid Khoury, CEO of HSBC Saudi Arabia said it was glad to play a part in this debut short term sukuk and thanked all parties who worked on the successful closure and settlement of the Sukuk.

'The process was very smooth and this demonstrated the high quality and maturity of the Saudi Debt Capital Markets,' he added.-TradeArabia News Service