Saudi Dar Al Arkan Prices $450M 5-Year Sukuk To Yield 11%

* username: rupertbu

Saudi Arabia's Dar Al Arkan Real Estate Development Co. (4300.SA) sold $450 million, five-year Islamic bonds, or sukuks, Thursday, offering a yield of 11%, according to a person familiar with the matter.

Proceeds from the 144a sale will go to fund the company's current and future development projects.

Deutsche Bank, Goldman Sachs and Unicorn Investment managed the deal.

Moody's rates the securities Ba2 while Standard & Poor's rates them BB-.

The deal is seen testing the waters for Middle Eastern credits after the debt woes of Dubai World sparked a panic across global markets late last year.

Henry Azzam, Deutsche Bank's chief executive for the Middle East, told attendees at a conference in Dubai Wednesday that Dar Al Arkan is in the process of selling $750 million of sukuks.

The company last raised 750 million Saudi riyals ($200 million) through a locally issued sukuk in May 2009.

Terms were as follows:


Amount: $450 million
Maturity: Feb. 18, 2015
Coupon: 10.75%
Price: 99.058
Yield: 11%
Ratings: Ba2 (Moody's Investors Service)
BB- (Standard & Poor's)END