Arabian Centres Company, the largest mall operator in Saudi Arabia, plans to issue a US dollar-denominated Islamic bond, marking the kingdom's first corporate international bond issuance in 2021.
Proceeds from the sukuk will be used for "general corporate purposes" and to meet the company's financial and strategic objectives, Arabian Centres said in a statement to the Tadawul stock exchange on Wednesday.
"The number and value of any sukuk to be offered will be determined based on market conditions and the company’s financial condition, funding requirement and strategy," Arabian Centres said in the bourse filing. "The sukuk offering will be subject to the approval of the relevant regulatory authorities."
In 2019, Arabian Centres issued its debut $500 million five-year international sukuk after raising 2.47 billion Saudi riyals ($658.8m) through its initial public offering in the same year. The IPO was the country's biggest since local lender National Commercial Bank raised $6bn in 2014.
Moody's Investors Service on Wednesday assigned a Ba2 rating to Arabian Centres' planned sukuk issuance, it said in a note.
The planned sukuk will be "benchmark size" ($500m or more), with proceeds being used to repay $200m drawn under a revolving credit facility and the rest to finance future capital spending, the agency said.
Moody's also upgraded to Ba2 from Ba3 rating on the $500m sukuk due in 2024.
Arabian Centres Company's corporate family rating (CFR) remains unchanged at Ba2. All ratings are on negative outlook.
"Post transaction, ACC's unsecured debt will increase to above 50 per cent of total debt (excluding leases and unamortised transaction costs) from 26 per cent as of December 2020 and as a result, the CFR will reference an unsecured rating," Moody's said.
Still, the company has "good liquidity" despite lost rental income because of discounts agreed with tenants during lockdown periods when its malls were closed, Moody's said.
Arabian Centres, which was was established in 2002, is owned by Saudi Arabian retailer Fawaz Alhokair Group.
The company operates 21 shopping malls in 11 cities, which have more than 4,300 retail stores, according to its website.
Arabian Centres' nine month net profit to December 31 fell 34.1 per cent year-on-year to 359.7m riyals as revenue dropped 16.5 per cent due to the impact of Covid-19 containment measures on its malls.
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Kyrgyzstan v Qatar, 5.45pm
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The five stages of early child’s play
From Dubai-based clinical psychologist Daniella Salazar:
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UAE currency: the story behind the money in your pockets
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Engine 3.6L V6
Transmission: Six-speed automatic
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1. Mathieu van der Poel (NED) Alpecin-Fenix 4:18:30
2. Tadej Pogacar (SLV) UAE Team Emirates 0:00:06
3. Primoz Roglic (SLV) Jumbo-Visma 0:00:06
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5. Julian Alaphilippe (FRA) Deceuninck-QuickStep 0:00:08
