Bank Alkhair, a Bahrain-headquartered Islamic wholesale bank, has announced the successful closure of the first tranche of a $750 million sukuk programme by Saudi Arabia's Dar Al Arkan real estate development company.
Bank Alkhair jointly led the sukuk programme, which is based on the Islamic wakala structure.
The programme was for funding of Dar Al Arkan's current and upcoming development projects.
The bank also acted as the Sharia adviser.
The first issue, a benchmark sized, five-year, Regulation S issue (Reg S), was offered on May 20.
The sukuk, which offers investors a coupon of 5.75 per cent, received an overwhelming response from regional and international investors and was significantly oversubscribed.
Dar Al Arkan opted to close the issue at $450m on May 21, despite receiving four-fold subscription and the overall book order reaching $1.68 billion.
Bank Alkhair, Deustche Bank, Goldman Sachs and Emirates NBD Capital were the joint bookrunners of the transaction.
"The oversubscription of the issue demonstrates increasing investor appetite for sukuk and for quality issuers like Dar Al Arkan," Bank Alkhair's global capital markets division head Ikbal Daredia said.
"The success of this sukuk issue, given the continued adverse global economic climate, is a testament to investor confidence in Dar Al Arkan's solid business model and Saudi Arabia's robust economy," Dar Al Arkan chairman Yousef Al Shelash said.
The sukuk was issued through the Dar Al Arkan Sukuk Company and marks Dar Al Arkan's fourth international sukuk issuance to date.
The company previously issued a $450m 144a sukuk in 2010 and two international sukuk with a total value of $1.6bn in 2007.
The company also raised $200m through a locally issued sukuk in May 2009.