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Thursday, Oct 06, 2022

Waleed Al-Mogbel: The success of over a Anchorbillion dollar sustainable financing for Al Rajhi Bank

Waleed Al-Mogbel: The success of over a Anchorbillion dollar sustainable financing for Al Rajhi Bank

Waleed Al-Mogbel, CEO of Al Rajhi Bank, announced thatthe bank has successfully concluded a 3-year dual tranche Sustainability Commodity Murabaha Facility with total amount exceeding $1 Billion, making Al Rajhi the first Islamic financial institution in the world to conclude such Shariah-compliant sustainability financing (use of proceeds).
This transaction is considered the largest Shariah-compliant Syndication in the Middle East that complies with the Environmental, Social, and Governance (ESG) practices. The deal was well received in the international and regional markets as Al Rajhi succeeded in increasing the financing from the initial offered amount for which a diversified group of 13 global investors from North America, Europe, Asia and the Middle East participated in the landmark transaction.

The proceed aimed to increase the bank's liquidity levels, which will have a positive impact on the overall Bank’s business activities.

The syndication, which was led by "HSBC" and "SMBC International Bank" as Mandated Lead Arrangers and Bookrunners.

The participation of global institutions is reflecting the trust in Al Rajhi Bank’s overall business activities, market share and market positioning. It also demonstrates the bank's commitment to environmental and social sustainability, as all proceeds from this financing will be allocated to qualified sustainable projects that are Sharia-compliant and have a positive impact, as specified in the bank's framework of sustainable financing.

This is considered the first ESG syndication loan in accordance with the bank's sustainable financing framework, which was established to facilitate the financing in accordance with theESG principles. Standard Chartered Bank assisted Al Rajhi Bank in developing the sustainable finance framework.

S&P Global assessed the framework as an independent entity and confirmed that it complies with the Green Loan Principles, Social Loan Principles, Environmentally Friendly Bond Principles, Social Bond Principles and Sustainability Bond Guidelines of ICMA.

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