Banque Saudi Fransi, which is part-owned by Credit Agricole, will issue up to 2.5 billion riyals ($667 million) in secondary sukuk, or Islamic bonds, after shareholders approved the move, the lender said on Tuesday.
The move is aimed at shoring up its supplementary capital reserves, or Tier 2 capital. Bonds and sukuk issued to raise Tier 2 capital are usually classed as subordinated debt, meaning they would be below secured creditors in the event of any restructuring.
"The board has agreed to ... approve the issuance of secondary sukuk in an amount that does not exceed 2.5 billion riyals and for a period that does not exceed seven years, with the possibility of recovery after five years," the bank said in a statement to the bourse.
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