Banque Saudi Fransi (BSFR), partly owned by Credit Agricole SA (ACA), is raising $750 million in Islamic bonds at the lowest rate among Persian Gulf banks this year, four people familiar with the matter said.
The Riyadh-based bank priced the five-year sukuk at 185 basis points, or 1.85 percentage points, over the benchmark midswap rate, the people said, declining to be identified because the information is private. That’s the lowest rate among at least eight financial institutions that raised dollar- denominated debt in the six-member Gulf Cooperation Council this year, data compiled by Bloomberg show.
Lower borrowing costs help Saudi banks raise long-term funds to meet a surging demand for loans in the biggest Arab economy. Bank lending in the kingdom, the world’s top oil exporter, advanced at an annual rate of 12.6 percent in March, the fastest pace in three years, central bank data show, as a $500 billion government spending plan encourages private businesses and consumers to borrow.
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