Alinma Bank has successfully priced a $500 million perpetual Additional Tier 1 (AT1) sukuk, attracting strong investor demand as Saudi financial institutions continue tapping international debt markets to strengthen capital positions and support growth strategies.
| Website | www.alinma.com/en/ |
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Alinma Bank (Arabic: مصرف الإنماء) is a Saudi joint stock company formed in accordance with Royal Decree No. M/15 dated 28 March 2006 and Ministerial Resolution No. 42 dated 27 March 2007. The bank was established with share capital of SAR 20 billion, consisting of 1.5 billion shares with a nominal value of SAR 10 per share. The company has more than 2,658 employees. The name translates to “growth” or “development” in Arabic.
Alinma Bank was ranked 10th on Forbes Middle East’s 30 Most Valuable Banks 2025 list. It also ranked 25th on Forbes Middle East’s Top 100 Listed Companies 2025 list.
The Saudi lender priced the non-call 5.5-year sukuk at par with a:
- Fixed resettable coupon of 6.625%
The issuance was structured as a Regulation S sustainable sukuk under a Mudaraba framework and is expected to be listed on the:
- London Stock Exchange International Securities Market
The transaction underscores continued investor appetite for Gulf financial sector debt despite ongoing global market volatility and elevated interest rates.
Strong Investor Demand Exceeds $1.7 Billion
Investor interest in the Alinma Bank sukuk significantly exceeded the offering size.
According to reports, the final orderbook surpassed:
- $1.7 billion
excluding joint lead manager interest.
That means the issuance was oversubscribed by more than three times the final deal size.
Strong demand allowed the bank to tighten pricing from the initial guidance area of approximately:
- 7.125%
down to the final coupon level of:
- 6.625%
The strong orderbook reflects continued international confidence in Saudi banking institutions and Islamic finance instruments.
Spread Set at 234.6 Basis Points Over US Treasuries
The AT1 sukuk carries a spread of:
- 234.6 basis points over US Treasuries
with the final yield matching the coupon at:
- 6.625%
The transaction structure is perpetual in nature but includes a first call date after 5.5 years, a common format for AT1 capital instruments issued by banks globally.
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AT1 securities are designed to strengthen bank capital buffers and absorb losses during periods of financial stress.
Sustainable Sukuk Market Continues Expanding
The issuance also contributes to the rapidly growing global market for sustainable Islamic finance products.
Sustainable sukuk combine traditional Shariah-compliant financing principles with environmental, social, or governance-linked financing frameworks.
Gulf financial institutions increasingly use sustainable sukuk to attract broader international investor participation while aligning with ESG-focused capital markets.
Saudi Arabia has become one of the region’s most active markets for Islamic sustainable debt issuance.
Alinma Previously Raised Similar Sukuk in 2025
This is not the first time Alinma Bank has successfully tapped the AT1 sukuk market.
Last August, the bank raised another:
- $500 million AT1 sustainable sukuk
with a coupon of:
- 6.25%
That earlier issuance also attracted strong investor interest, generating a final orderbook of approximately:
- $1.75 billion
The slightly higher coupon in the latest issuance reflects evolving global interest rate conditions and broader debt market dynamics.
Saudi Banks Continue Strengthening Capital Positions
Saudi banks have remained active issuers in both local and international debt markets over recent years.
Financial institutions across the kingdom continue raising capital to support:
- Lending growth
- Economic diversification
- Infrastructure financing
- Digital banking expansion
- Regulatory capital requirements
The Saudi banking sector has benefited significantly from:
- Strong oil revenues
- Large government spending programs
- Vision 2030 investment projects
- Expanding private sector activity
Domestic SAR Sukuk Program Also Expanding
Earlier this month, Alinma Bank also opened subscriptions for a Saudi riyal-denominated AT1 perpetual sukuk issued through private placement.
The local issuance forms part of the bank’s broader:
- SAR 5 billion ($1.33 billion) sukuk program
The dual local and international fundraising strategy reflects growing sophistication within Saudi capital markets.
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Strong Credit Ratings Support Investor Confidence
The bank currently holds strong investment-grade credit ratings from major agencies:
- Moody’s: A2
- S&P: A-
- Fitch: A-
All ratings reportedly carry:
- Stable outlooks
The solid credit profile helped support strong demand for the latest sukuk issuance.
Saudi banks generally continue benefiting from strong sovereign support assumptions and relatively healthy balance sheets compared to many global peers.
Islamic Finance Market Remains Resilient
The latest transaction also demonstrates the continued resilience of the global Islamic finance sector.
Sukuk markets have remained active despite broader uncertainty surrounding:
- Inflation
- Interest rates
- Geopolitical tensions
- Slower global growth
Middle Eastern issuers, particularly from the Gulf region, continue dominating global sukuk issuance volumes.
Saudi Arabia Expanding Global Financial Influence
The transaction further highlights Saudi Arabia’s growing role within global capital markets.
As the kingdom advances its:
- Vision 2030 economic diversification strategy
Saudi financial institutions are increasingly engaging international investors through:
- Sukuk issuances
- IPOs
- ESG financing
- Infrastructure investments
- Cross-border partnerships
Islamic finance remains a central pillar of that expansion strategy.
Kyndryl Collaboration Highlights Digital Banking Push
Separately, Kyndryl recently announced the successful completion of an IT resiliency and disaster recovery orchestration project for Alinma Bank.
The collaboration focused on:
- IT disaster recovery automation
- Infrastructure resiliency
- Operational continuity
- Banking technology modernization
The project reflects the growing emphasis Saudi banks place on digital transformation and operational resilience.
Final Thoughts
Alinma Bank has once again demonstrated strong access to international Islamic capital markets after successfully pricing a heavily oversubscribed $500 million AT1 sukuk.
The issuance highlights continued investor confidence in Saudi banking institutions, the strength of Gulf Islamic finance markets, and the growing global appetite for sustainable sukuk products.
As Saudi Arabia continues modernizing its financial sector and expanding international market participation, transactions like Alinma’s latest sukuk issuance are likely to remain an important part of the kingdom’s broader economic transformation strategy.
