FINANCIAL NEWS

Saudi Dar Al-Arkan signs swap agreement

24 Jun 2010

(MENAFN) Dar Al-Arkan, Saudi Arabia?s biggest real estate developer by market value, said that it has signed a profit rate swap agreement to lower the costs of Islamic bonds, or Sukuk, worth $450 million, Reuters reported.

In February, the firm sold the Sukuk, priced at 10.75 percent, as part of efforts to fund its expansion, in the middle of a months-long freeze in Gulf Arab fixed-income markets which was sparked by Dubai?s debt woes.

The developer had immediate refinancing needs with an earlier $600 million Sukuk maturing in March and therefore could not postpone its February issuance. Many companies in the region have postponed issuances and have faced higher financing costs as a result.

To lower the costs, Dar Al-Arkan said it had signed a swap agreement, compliant with Islamic law, to cover 50 percent of the Sukuk, or $225 million, it said in a statement to the Saudi bourse.

More News

This website uses cookies to ensure you get the best experience and by clicking “I Accept” below, you consent to the use of cookies. Learn more