EL7.AI
BondsMediumUpdated•Originally published 6 September 2026•Updated 6 September 2026•
2 min read

Al Rajhi completes $600 million Tier 2 social sukuk offering at 6.232%

Key Facts

1The $600 million issue comprises 3,000 certificates with a $200,000 par value each.
2The annual return is 6.232%, the tenor is 10.5 years and the certificates are callable after 5.25 years.
3The bank set September 10, 2026, as the settlement date.
4The previous $1 billion Tier 2 social issue was scheduled to settle on September 16, 2025, with a 5.651% annual return.

Al Rajhi Bank announced on September 6, 2026, that it had completed a $600 million international Tier 2 social sukuk offering. The dollar-denominated transaction was issued under the bank's international trust certificate programme. The annual return was set at 6.232%. The certificates have a 10.5-year tenor and are callable after 5.25 years.

The issue comprises 3,000 certificates based on a $200,000 par value for each certificate. The offer began on September 3, 2026, and its expected closing date was September 4, 2026, according to the commencement announcement. It targeted eligible investors in Saudi Arabia and international markets. The bank appointed 9 institutions as joint lead managers and bookrunners for the transaction.

In September 2025, the bank completed an earlier $1 billion Tier 2 social sukuk offering. Settlement of that issue was set for September 16, 2025, and its annual return was 5.651%. The bank's report showed that, as of December 31, 2025, $1 billion of social liabilities was matched by $1 billion of eligible social assets, with 100% of the proceeds allocated. The reported assets were in affordable housing, but the data as of December 31, 2025, do not establish allocation of proceeds from the $600 million issue completed on September 6, 2026.

The Basel Framework classifies Tier 2 as capital intended to absorb losses when a bank becomes non-viable. Eligibility criteria require the instruments to be subordinated to depositors and general creditors and to be unsecured. They also require an original maturity of at least 5 years and permit an issuer call only after at least 5 years. The call after 5.25 years is therefore an option for the bank rather than a promise of repayment, and it remains subject to supervisory approval and capital-related conditions.

The bank set September 10, 2026, as the settlement date. The certificates are due to be listed on the London Stock Exchange's International Securities Market and may be sold in reliance on Regulation S under the US Securities Act of 1933. The announcement permits redemption in cases specified in the offering circular but does not confirm that the 5.25-year call will be exercised. The completion announcement did not disclose the order-book size, final investor distribution or how the $600 million proceeds will be allocated to social assets.