Saudi’s Dar Al Arkan Plans Benchmark Five-Year Dollar Sukuk

Saudi Arabia’s Dar Al Arkan Real Estate Development Co plans to price a benchmark-sized, dollar-denominated sukuk of five years duration this week, a document from lead arrangers said.

Initial price thoughts for the sukuk are at the high six per cent range, the document said.

Benchmark size traditionally means around $300 million for issuers classified as high-yield – meaning they pay a higher interest rate because of their low credit rating.

Dar Al Arkan is rated B+ by Standard & Poor’s, four notches below the lowest investment grade score, albeit with a positive outlook.

The developer said on Monday it would talk with international investors on Tuesday ahead of a potential sukuk.

Dar Al Arkan has chosen Alkhair Capital – a unit of Bahrain-based Bank Alkhair, whose chairman is the same as Dar Al Arkan’s – Deutsche Bank, Emirates NBD and Goldman Sachs as coordinators and bookrunners of the potential deal.

Abu Dhabi-based Al Hilal Bank, as well as Qatari trio Al Rayan Investment, Barwa Bank and QInvest are classified as bookrunners.