Impact46 completes third sukuk transaction, issues monthly brief

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Impact46 is proud to announce the successful closing of the first issuance of Bidaya Finance’s senior unsecured program. This marks Impact46’s third major Sukuk transaction, marking a significant milestone in its ongoing role as a leading financial advisor and arranger in the Saudi debt capital markets.

With this recent closing, Impact46 successfully structured and placed three landmark debt capital market transactions for prominent, investment-grade, mid-market SAMA-licensed non-banking financial institutions:

Delivering Through Challenging Market Conditions

Impact46 successfully raised SAR 1 billion across these three transactions,  despite a backdrop of evolving market dynamics, product innovation, and periods of constrained investor appetite.

The Tamweel Aloula AT1 sukuk represented a first-of-its-kind issuance for an NBFI, introducing a structure previously limited to banks in Saudi Arabia. This required navigating investor unfamiliarity with non-bank AT1 instruments and building confidence around a new asset class.

The Raya Financing AT1 sukuk was executed in a rising SAIBOR environment, where banks were issuing AT1 instruments at increasingly higher yields, creating a more competitive landscape for investor allocation.

The Bidaya Finance senior unsecured sukuk was completed during a period of softer market appetite, marked by geopolitical uncertainty, a slowdown in primary market activity including postponed IPOs, and the seasonal impact of Ramadan.

Pioneering Capital Market Solutions

These transactions highlight a clear shift in the market: strong private companies are increasingly turning to sukuk as a reliable way to fund their growth and strategic plans. As more issuers follow this path, sukuk is becoming a flexible and attractive financing option for both private and listed companies, while also offering investors access to a wider pool of quality investment opportunities.

By working across a spectrum of sukuk structures, Impact46 has demonstrated that the market is ready for diverse capital solutions:

Plain Vanilla Solutions:

Transactions like Bidaya's 3-year senior unsecured sukuk show that traditional, straightforward debt structures are highly effective for general corporate funding and meeting immediate growth needs.

Innovative Capital Structures

Perpetual Additional Tier 1 Capital Sukuk (AT1) instruments utilized by Raya Financing and Tamweel Aloula represent a major leap forward for the sector. Historically, AT1s have been a tool unique to commercial banks in Saudi Arabia. By successfully structuring and placing these perpetual instruments for NBFIs, Impact46 has enabled these companies to meet strict regulatory requirements and optimize their capital bases without diluting shareholder equity.

Positioning for the Future

The successful closing of these issuances firmly cements Impact46’s leading position as an advisor and arranger of sukuk solutions for mid market corporates. 

Impact46’s Credit Advisory department is launching a new monthly Saudi Public Sukuk Market Brief. Click here to subscribe: https://linkly.link/2emem to receive the latest market trends, debt capital market insights, and deal updates directly in your inbox when our first edition launches.