Saudi Dar Swaps $225 Million of Debt to Floating Rate - BusinessWeek

Dar Al Arkan Real Estate Development Co., Saudi Arabia’s biggest property company by market value, exchanged half of its $450 million fixed-rate Islamic bond as it seeks to cut borrowing costs.

The company swapped $225 million into floating-rate notes, reducing the profit it pays on the five-year sukuk to 7.95 percent more than the three-month Saudi interbank offered rate, according to a statement to the Dubai bourse today. The notes paid a coupon of 10.75 percent when they were sold in February.

“This transaction comes in line with the company’s strategy to reduce its cost of financing by benefiting from the current available lower variable rates,” the company said.