Banque Saudi Fransi, a Saudi Arabian lender part-owned by Credit Agricole SA (ACA), set up a $2 billion Islamic bond program as part of the Riyadh-based lender’s plans to diversify its sources of financing.
“We are properly equipped to raise funding when and if needed from the international market,” Chief Financial Officer Philippe Touchard said in a phone interview from Riyadh today. “The $2 billion program might be used during different phases over the next five years.”
Islamic bond sales in Saudi Arabia, the world’s largest oil exporter, rose to a record $6.55 billion so far this year as the government’s spending plan encourages companies to raise funds to invest. The state-run General Authority of Civil Aviation sold 15 billion riyals ($4 billion) of Islamic bonds in January. Saudi Electricity Co. (SECO) last month raised a combined $1.75 billion from an issue of five- and 10-year sukuk, securities that pay returns on assets to comply Islam’s ban on interest.
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