ACWA Power Company, a publicly listed company on the Saudi Arabian Tadawul stock exchange (ACWA Power: 2082) and a leading Saudi developer, investor, and operator of power generation, water desalination and green hydrogen plants worldwide, announced today that it has successfully raised SAR 1.8 billion, through a senior, unsecured Sukuk floating rate issuance with a 7-year tenor along with a call option on the fifth year anniversary of the issue date.
The issue was structured on a Shariah compliant Mudaraba-Murabaha basis. The transaction marks the company's second issuance under the SAR 5bn Sukuk program, following the SAR 2.8 bn phase 1 issue in June 2021. The proceeds will be used for general corporate funding purposes besides phase 2 of ACWA Power's investment in Jazan IGCC brownfield acquisition.
The pricing guidance (Investor Protection Trust) released on 10th January was tightened by 5-10 basis points per annum for the final pricing on 18th January of 3m SAIBOR + 95bps p.a with a step up to 3m SAIBOR + 105bps p.a on the 5th year anniversary of the Issue Date The issuance was successfully closed on February 1st. This marked the first double digit margin secured in the Saudi capital markets by any corporate issuer since 2017.
The issuance still attracted strong investor interest from various new and repeat investors comprising of a diversified base of 22 banks, government funds, asset managers, and insurance companies. A healthy order book of SAR 4.02 bn translates into a 2,2X oversubscription and which enabled the issuer to optimise the allocation with non-bank investors accounting for 32.2%.
The diverse pool of repeat and new sophisticated investors in ACWA Power's second Sukuk issuance reflects the trust, confidence, and faith in the Saudi debt capital market and ACWA Power's strong credit fundamentals as well as the large and diverse growth opportunities for the company as it leads the energy transition in the Kingdom of Saudi Arabia and international markets.
Commenting on this milestone announcement, Mohammed Abunayyan, Chairman of ACWA Power, said: "The success of ACWA Power's phase 2 Sukuk issuance under the SAR 5billion Sukuk programme reflects the market's faith in the kingdom's debt capital markets as well as ACWA Power's fundamental strength and growth outlook to attract new and repeat sophisticated investors alike. We are committed to supporting the CMA and Tadawul's ongoing efforts to strengthen and deepen the domestic Debt Capital Market base."
"The strong and diverse investor appetite in ACWA Power's second issuance and the record competitive pricing is a testament of investor confidence in our robust business model and credit quality. The Sukuk programme has helped diversify our funding sources as we continue our journey in the energy transition to deliver sustainable and affordable essentials for life, renewable energy and desalinated water, for millions of people in the Kingdom of Saudi Arabia and around the 11 additional countries in our portfolio," concluded Abdulhameed Almuhaidib, Chief Financial Officer at ACWA Power.
HSBC Saudi Arabia and SNB Capital Company reprised their role as Joint Lead Managers and Bookrunners for the issuance, with HSBC Issuer Services also acting as Sukuk holders' Agent and Payment Administrator. Norton Rose Fulbright (NRF)'s London and Mohammed Al-Ghamdi Law Firm - In Association with Norton Rose Fulbright US LLP acted as Issuer Counsel while the JLMs were advised by Allen & Overy and Khoshaim & Associates.