Alinma Bank closes $800M perpetual sukuk at 6.5% return
What's the deal? Alinma Bank has completed a SAR 3 billion (roughly $800M) sukuk offering, issuing perpetual Islamic bonds with a 6.5% annual return. The offering, announced on May 21, comprised 3,000 certificates with a par value of SAR 1 million each and was conducted through private placement.
Alinma Capital Company and HSBC Saudi Arabia served as joint lead managers on the deal.
The sukuk falls under Alinma's broader SAR 5 billion programme and qualifies as Additional Tier 1 capital — a key layer of a bank's financial cushion designed to absorb losses and bolster resilience.
Why now? Saudi banks have been tapping capital markets aggressively to shore up balance sheets as the kingdom's Vision 2030 spending boom drives rapid credit growth. Strengthening Tier 1 capital helps Alinma keep pace with rising loan demand while meeting regulatory requirements.
The perpetual structure — meaning the sukuk has no fixed maturity date — gives the bank long-term capital flexibility without a looming repayment deadline.
What could go wrong? A 6.5% return on perpetual instruments carries reinvestment and duration risk for holders if interest rates shift. For Alinma, the obligation to service these payments indefinitely could weigh on profitability if economic conditions tighten.
The signal: The deal reflects a broader trend of Gulf banks turning to sukuk markets to fund ambitious national development agendas. As Saudi Arabia channels hundreds of billions into megaprojects, its banking sector needs deep, flexible capital pools — and Islamic bond markets are stepping up to provide them.
Read more: sahmcapital.com
