March 14, 2018 / 6:16 PM / in 7 months

UPDATE 1-Saudi home finance firm BHF announces debut sukuk programme

(Adds CEO quotes)

RIYADH, March 14 (Reuters) - Bidaya Home Finance (BHF), partly owned by Saudi Arabia’s sovereign wealth fund Public Investment Fund, announced on Wednesday its debut programme to sell Islamic sukuk bonds worth 500 million riyals ($133.33 million).

The Riyadh-based company aims to make home financing more readily available by offering sharia-compliant products to Saudi retail customers in a country with low levels of home ownership.

The Housing Ministry wants the local mortgage market to climb to a total of 502 billion riyals by 2020 from 290 billion riyals now, helped by measures to stimulate mortgage lending and home purchases.

The government aims to raise household ownership to 70 percent by 2030, which means adding 1.2 million housing units.

BHF hired Ashmore Investment Saudi Arabia to arrange the programme while Albilad Capital was hired as “dealer.”

The sukuk programme was “a core component” of BHF’s medium-term financing strategy, CEO Mazin Al Ghunaim said, adding that the firm wanted to support the domestic capital markets and help “home ownership for all.”

He said the unsecured sukuk would be made in two tranches of 250 million riyals each, with a tenor of less than 24 months and a 3.75 percent yield.

BHF aimed to launch the first tranche in the second quarter of 2018 and the second towards the end of the year “if things go very well,” he said.

Other major shareholders in BHF, which obtained a licence from the Saudi Arabian Monetary Agency (SAMA) in 2015, include the Jeddah-based Islamic Corp for Development of the Private Sector, part of the Islamic Development Bank.

$1 = 3.7501 riyals Reporting by Marwa Rashad Editing by Saeed Azhar and Edmund Blair

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