Saudi Binladin Group (SBG) has successfully closed its second short term sukuk, attracting more than SR3 billion of orders for a SR1 billion issuance, the company said in a statement Wednesday. Books were opened Saturday (July 16) and were closed in the same day. The privately placed sukuk was offered to Saudi sophisticated investors and issued through SBG Sukuk Co. Total number of investors reached 39, comprising of mutual funds, private investors, government-linked entities, financial institutes, and corporates which sets a new record for number of private investors in private placements in Saudi Arabia. Following on from the success of last year's issuance, SBG's second visit to the short term sukuk market has managed to attract even higher demand than the previous issue allowing for a longer term instrument with tighter pricing. The sukuk has a maturity of 364 days and pays a profit rate of 2.5 percent per annum. The first sukuk, which was issued in July 2010, matured in April 2011. With the current low interest rate environment, investors are finding it more challenging to find appropriate investments, and SBG short term Sukuk represents an ideal choice. Meanwhile, Turkish Star newspaper reported Wednesday that SBG is planning to invest $500 million in a housing project in Turkey. Analysts have suggested that increasing flows of capital from the Middle East are helping Turkey to finance its massive current account deficit, while euro zone turmoil saps flows from European countries. SBG said it had no immediate comment on the Star report. Star said the housing project would be in the town of Armutlu in northwest Turkey and the group was in the process of establish a company in Turkey to handle the investment. It was also considering investment opportunities in agriculture and health, the newspaper said.
