The government-owned utility company Saudi Electricity (SEC), which has ratings of Aa3/A/A+ from Moody’s, S&P, and Fitch, has told banks to start setting up a series of fixed-income investor calls for a Regulation S senior unsecured USD-denominated dual-tranche sukuk issuance today.
Subject to market conditions, the sukuk sale will be divided into five-year and 10-year tranches, with one tranche possibly being in green format. The certificates will be issued under the Trust Certificate Issuance Program of the Saudi Electricity Sukuk Programme Company, which is anticipated to receive an A+ rating from Fitch and an Aa3 rating from Moody’s.
While Abu Dhabi Commercial Bank, First Abu Dhabi Bank, Mizuho, MUFG, SMBC, and IMI-Intesa Sanpaolo are active book-runners, HSBC and Standard Chartered Bank serve as acting joint global coordinators. Furthermore, the following companies have been designated as passive book-runners: Alistithmar Capital, BofA Securities, ICBC International Securities Limited, BNP Paribas, Emirates NBD Capital, NATIXIS, Dubai Islamic Bank PJSC, Bank of China, and SNB Capital.
Additionally, SMBC and MUFG are working together as green structuring agents. SEC is the leading electricity producer in Saudi Arabia and holds a monopoly on transmission and distribution across the Kingdom.
The Public Investment Fund (PIF), a sovereign wealth fund, controls 75% of it. Its net debt to EBITDA ratio is 3.1x, and 45% of its current debt has maturities beyond 2028.
As it increased its energy investments, it spent SAR 39.7 billion in capital expenditures during the first nine months of 2024. By 2030, SEC wants to increase the proportion of renewable energy to 50% of the energy mix. The SEC signed a USD 3.6 billion worldwide syndicated credit facility with a five-year term and two one-year extension options in December.
The issuance remains subject to regulatory approvals and will be conducted in compliance with applicable laws and regulations.
“This announcement does not constitute an offer, invitation, or solicitation to purchase, acquire, or subscribe to any securities and is subject to the sukuk’s terms and conditions,” SEC stated.