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DUBAI, April 5 (Reuters) - Saudi Arabia has chosen a hybrid structure for its debut international sukuk, the prospectus for the offer showed, a format widely used in the Saudi local debt market, but not the most popular for sovereign issues.
An amount equal to 51 percent of the bond proceeds will be used in a mudaraba agreement, a form of Islamic investment management partnership, while the remaining 49 percent of the proceeds will be used under a murabaha facility by the trustee, a Cayman Islands-incorporated company called KSA Sukuk Limited, to purchase sharia-compliant commodities, the prospectus says.
The kingdom’s Islamic bond, expected to go up to $10 billion, will be its second international debt sale after it issued in October last year a $17.5 billion conventional bond, the largest bond ever sold across emerging markets. (Reporting by Davide Barbuscia; editing by Saeed Azhar)