(Bloomberg) -- Saudi Arabia’s Al Rajhi Bank has raised a $1.92 billion sustainability-linked Islamic syndicated loan, according to a person familiar with the matter, in what is the largest financing from a Middle Eastern bank this year.
The three-year sharia-compliant facility drew nearly 20 lenders, including coordinating banks Emirates NBD Bank PJSC, HSBC Holdings and Maybank Investment Bank Bhd., said the person, who asked not to be identified discussing private matters. The financing — split into a $1.2 billion tranche and a $705 million portion — will be used for general corporate purposes, the person added.
Al Rajhi’s latest facility comes amid Saudi Arabia’s ongoing liquidity crisis as loan growth outstripped deposits to support a domestic economy that contracted last year. Bloomberg Intelligence estimates that local lenders may need to issue at least $10 billion to $15 billion a year in new debt through 2028 to support the country’s investments.
Middle Eastern banks have raised nearly $50 billion in loans in the first nine months of the year, a three-fold increase from $16 billion in the previous corresponding period, according Bloomberg-compiled data.
Al Rajhi Bank didn’t respond to a request for comment.
The bank’s deal is considered rare given that there are not many dollar-only Islamic loans linked to environmental, social and governance metrics of this magnitude. The loan follows the issuance of Al Rajhi’s $1 billion Islamic bond in May.
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