Construction conglomerate Saudi Binladin Group (SBG) has raised SR1 billion ($266.7 million) through an Islamic bond to finance a hotel, the lead arranger said on Wednesday. A combined team across the Dubai and London offices of Clifford Chance and Al-Jadaan & Partners law firm based in Saudi Arabia have advised HSBC Saudi Arabia as lead manager on the issuance of over SR1 billion Sukuk maturing 2013. The Sukuk certificates are issued by Purple Island Corp, a special purpose vehicle incorporated in the British Virgin Islands affiliated with the Saudi Bin Ladin Group. The transaction utilized an Ijara and Mudaraba structure with respect to a usufruct right over 13 floors of the Al-Safa Tower of the Abraj Al-Bait Complex in Makkah. Andrew Coats, Finance and Capital Markets Partner based in London, said: “The transaction was structured and executed in record time and marks another ‘first' for our Saudi Arabian securities practice.” Qudeer Latif, partner and head of Islamic Finance based in Dubai, said: “We are delighted to have worked with HSBC and its Shariah board in structuring and documenting this innovative real estate Sukuk. This transaction builds up on our Shariah-compliant financing expertise and highlights the integrated service Clifford Chance can provide in Saudi Arabia.” The transaction is notable for being the first ever real estate Sukuk in Makkah. The Sukuk has a 5-year maturity with semi-annual profit payments. Binladin has earlier raised SR3.2 billion through an Islamic facility to help fund construction of a university north of Jeddah, one of the banks arranging the deal said in March. Borrowers around the world have been hard-hit by a global credit crunch following the US subprime mortgage crisis. But the Gulf Arab region has been largely seen as less exposed to international financial turmoil as it reaps windfall revenues from a near five-fold in oil prices. __
