The Saudi Electricity Company pulled the trigger on a fresh dual-tranche issuance of USD-denominated green and conventional sukuk, according to a Tadawul filing yesterday. The sale, which closes today, includes 10-year green sukuk and 30-year conventional notes, the filing says.

By the numbers: While the company did not specify the total value of its issuance in the filing, saying that this would be subject to market conditions, Reuters says the PIF-backed firm is planning to raise USD 2 bn from the sale. The 10-year sukuk are being offered at 165 basis points (bps) above US Treasuries (UST), while the 30-year notes are offered at 240 bps above UST, Reuters reports, citing a bank document. Both debt instruments will be listed on the London Stock Exchange at a par value of USD 200k. Annual returns will be subject to market conditions, according to the filing.

Strong investor appetite: The green sukuk issuance is so far nearly 7.6x oversubscribed, drawing some USD 9.2 bn in demands, while the 30-year notes have attracted some USD 6.2 bn in subscriptions, making it c. 7.8x oversubscribed, the newswire reports. The company initially offered the 10-year green sukuk at nearly 120 bps above UST, and 205 bps above UST for the 30-year conventional note, before tightening the spreads due to higher-than-anticipated demand, which totaled USD 15.4 bn for both issuances.

Attracting international interest: Demand for the green issuance was “not entirely regionally-focused, it was actually quite widespread,” a source with knowledge of the transaction told the newswire, adding that there is a “supply-demand imbalance” in the regional sukuk debt market. Both tranches mark the first SEC issuance in two years, Reuters notes.

Advisors: HSBC, Standard Chartered Bank, JPMorgan, First Abu Dhabi Bank, MUFG Securities, Mizuho International, SMBC Nikko Capital Markets Limited, SNB Capital Company, Al Rajhi Capital Company, Saudi Fransi Capital, Abu Dhabi Islamic Bank, Bank of China, Abu Dhabi Commercial bank, Natixis, and Société Générale acted as joint lead managers on the issuance.

Not SEC’s first green bond issuance: In 2020, the company issued KSA’s first corporate green sukuk, raising USD 1.3 bn from a dual-tranche Islamic green bond comprising a 5-year USD 650 mn note and a USD 650 mn 10-year sukuk, SEC notes.