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ENERGY & OFFSHORE | Staff Reporter, Singapore

Vallianz enters Middle East Islamic bonds market with $375.33m Sukuk

Four Saudi Arabian financial institutions will manage it.

Vallianz has entered the Sukuk market in the Middle East with its maiden Saudi Riyal denominated Sukuk issuance of SAR1b, or roughly $375.33m (Sukuk).

According to the company’s media release, the issuance of Shariah-compliant Sukuk was facilitated through Rawabi Vallianz Offshore Services (RVOS), and jointly led and managed by four financial institutions in Saudi Arabia—Alinma Investment Co., Saudi Fransi Capital, Saudi Hollandi Capital, and GIB Capital LLC.

The Sukuk has a fixed term of five years, and amortised principal repayments during the term as well as a bullet repayment of the outstanding principal amount at completion of the tenure.

The company sees Saudi Arabia as the ideal location to issue its first Sukuk as the country’s financial institutions and investors have knowledge are familiar with the O&G business in the region.

Moreover, Vallianz thinks that the Sukuk will open a new avenue of future funding for the company’s burgeoning Middle East operations. The company further asserts that the Sukuk will result in multiple benefits for the group as it lowers funding costs, improves cash flow, and strengthens Vallianz’s balance sheet due to a cutdown in overall debt level and gearing.

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