SAUDI ARABIA: The Arab Petroleum Investments Corporation (APICORP) is looking to tap the Islamic debt capital markets with its debut Sukuk sale expected this year as the Saudi-based multilateral development bank positions itself to become a regular international Sukuk issuer.
The offering from APICORP, the brainchild of the Organization of Arab Petroleum Exporting Countries (OAPEC) created to develop the region’s oil and gas industry, will be made through its recently established US$3 billion Sukuk program to be listed on the Irish Stock Exchange and arranged solely by Standard Chartered.
The bank’s decision to enter the Islamic bond space comes at a time when the multilateral lender is looking to minimize overall financing costs, extend its debt maturity profile and more significantly, gain better access to a diversified pool of global investors.
“The lower financing costs that APICORP is expecting to secure after this new program will enhance APICORP’s ability to foster its development mandate of the hydrocarbon and energy-related sectors in Arab countries,” explained APICORP chairman Dr Aabed A Al-Saadoun, who further elaborated in a statement that this could be achieved through the provision of attractive financing terms to clients and partners as well as through the firm’s enhanced ability to participate in financing strategic energy projects which may not attract commercial banks from either a return or tenor perspective.
Established in 1974, APICORP has since channeled equity investments in over US$13 billion-worth of oil and gas joint venture projects and participated in over US$126 billion-worth of direct and syndicated energy finance deals, bringing its average commitments in these transactions (equity and debt) to over US$11 billion. It is assigned a long-term issuer rating of ‘Aa3’ and short-term issuer rating of ‘P-1’ by Moody’s.