Al Rajhi Bank raises $600M in social sukuk to fund housing and jobs
What's the deal? Al Rajhi Bank has raised $600 million through an issuance of Tier 2 social sukuk denominated in US dollars. The lender, one of the region's largest Shariah-compliant institutions, finalised the placement after announcing the offering on September 3, 2026, targeting qualified institutional investors in Saudi Arabia and global debt markets.
The terms: The sukuk carries an annual profit rate of 6.232% and a 10.5-year maturity, with an issuer call option after 5.25 years. The offering comprises 3,000 trust certificates at a face value of $200,000 each, listed on the London Stock ExchangeDealroom has a profile for this one. Try Dealroom →'s International Securities Market. Settlement is set for September 10, 2026.
Why now? The deal lands amid a surge in Saudi banking debt issuances through 2026, as lenders tap Tier 1 and Tier 2 instruments to expand lending capacity and maintain capital adequacy under Basel III.
What's the endgame? Net proceeds will fund eligible social assets under the bank's sustainable finance framework, including affordable housing, job creation programmes, and access to subsidised education and healthcare. Tier 2 capital gives the bank regulatory headroom to support credit growth without diluting equity.
Investor demand was strong. Initial yield guidance of about 200 basis points over US Treasuries tightened to 170 basis points during bookbuilding, a 30-basis-point compression that pointed to a robust order book, according to ReutersDealroom has a profile for this one. Try Dealroom →.
The signal: The issuance builds on a $1 billion Tier 2 social sukuk the bank sold in September 2025, showing it treats social-linked capital as a regular balance sheet tool rather than a one-off. At $600 million, the deal sits near the median for its class, reinforcing how sustainable finance is becoming routine in the Kingdom's capital markets.
Image credit: Generated with Gemini
