Al Rajhi Bank completes $600m Tier 2 social sukuk offering

07/09/2026 04:05 AST

Al Rajhi Bank has completed a $600 million Tier 2 social sukuk offering, with the 10.5-year certificates carrying an annual return of 6.23 percent.

Settlement is scheduled for Sept. 10, according to the bank's Saudi Exchange filing.

The latest offering comprises 3,000 trust certificates, each with a par value of $200,000. The instruments are callable after 5.25 years.

The transaction marks the Saudi lender's second international Tier 2 social sukuk issuance, following a $1 billion offering completed in September 2025.

The issuance comes as Saudi banks increasingly tap international debt markets to diversify their funding sources and bolster regulatory capital, while strong credit growth and the kingdom's economic transformation continue to drive demand for financing.

"The Trust Certificates may be redeemed in certain cases as detailed in the offering circular in relation to the Trust Certificates," the statement said.

The certificates will be listed on the London Stock Exchange's International Securities Market and may be sold in reliance on Regulation S under the US Securities Act of 1933.

The offering was directed at eligible investors in Saudi Arabia and international markets. Al Rajhi Bank announced its intention to issue the certificates and commenced the offering on Sept. 3.

Al Rajhi Capital, Arqaam Capital, Banco Bilbao Vizcaya Argentaria and Citigroup were among the joint lead managers and bookrunners for the offering. Intesa Sanpaolo's London branch, Morgan Stanley, SMBC Bank International, Standard Chartered and Warba Bank also held the role.

Previous issuance
Al Rajhi Bank's $1 billion Tier 2 social sukuk issued in September 2025 marked its first Tier 2 transaction in international debt markets, according to the lender's 2026 allocation and impact report.

That issuance carried a 5.65 percent annual return, had a 10.5-year maturity and was callable after five years. It was also listed on the London Stock Exchange's International Securities Market.

The bank said the earlier instrument was issued under its sustainable finance framework and structured to support capital adequacy while advancing social objectives.

The latest transaction follows a 14.2 percent annual increase in Al Rajhi Bank's first-half net profit to SR13.76 billion ($3.67 billion), according to a separate Saudi Exchange disclosure.

The lender reported assets of SR1.05 trillion at the end of June, while its financing portfolio reached SR762.1 billion and customer deposits stood at SR688.4 billion.

Arab News