Saudi Arabia’s Neom is planning its debut riyal bond sale for later this year as it looks for more sources of funding for the $1.5 trillion worth of construction projects it’s planned for the futuristic city, according to people familiar with the matter.
Neom has appointed banks including HSBC Holdings Plc and the securities units of Al Rajhi Bank and Saudi National Bank to advise on the sale of Islamic bonds, or sukuk, the people said. The debt would be denominated in the local currency and could raise as much as 5 billion riyals ($1.3 billion), they said, asking not to be identified as the information is private.
The sukuk sale could come as early as the second half of this year, the people said. A final decision on the timing and offering size will depend on market conditions, they added.
Representatives for Neom, HSBC and Saudi National Bank declined to comment, while a spokesperson for Al Rajhi Bank did not respond to a request for comment.
The city, located in the kingdom’s northwestern desert, is a brainchild of Crown Prince Mohammed bin Salman. The development’s signature project is The Line, a pair of mirror-clad skyscrapers that the kingdom hopes will ultimately stretch 170 kilometers and house all of a city’s normal functions. Neom’s plans also include an industrial area, ports and tourism developments.
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