Saudi lender Alinma Bank (1150) has priced a $500mn US dollar-denominated sustainable Additional Tier 1 capital certificate at 6.625%, the Tadawul-listed bank said in a regulatory filing on May 21.

The bank issued 2,500 certificates at a par value of $200,000 each, with a perpetual maturity callable after five and a half years. Settlement of the issuance is expected on June 3.

The certificates may be redeemed before the scheduled maturity date in certain cases as detailed in the offering circular for the Additional Tier 1 Capital Certificate Issuance Programme.

The certificates will be listed on the International Securities Market of the London Stock Exchange and may only be sold in reliance on Regulation S under the US Securities Act of 1933.

Alinma Bank opened the offering on May 20 with a one-day book-building window, mandating Abu Dhabi Islamic Bank, Alinma Capital, Arqaam Capital, ASB Capital, Citigroup Global Markets, DBS Bank, Emirates NBD Bank, First Abu Dhabi Bank, Goldman Sachs International, J.P. Morgan Securities, Mashreqbank acting through its Islamic Banking Division, Standard Chartered Bank and Warba Bank as joint lead managers.

Alinma Bank is one of Saudi Arabia's largest Sharia-compliant lenders and is listed on the Saudi exchange Tadawul. The sustainable label on the certificates aligns the proceeds with environmental and social financing objectives, in line with growing regional demand for instruments tied to sustainability frameworks.

Saudi banks have been active issuers of Additional Tier 1 instruments to bolster capital buffers as the kingdom funds large-scale projects under the Vision 2030 economic diversification programme. The wider Gulf market has seen rising volumes of dollar-denominated Islamic capital instruments as regional lenders tap international investor demand.

The pricing comes against the backdrop of elevated geopolitical tension following the recent conflict between Iran, Israel and the United States, with the 6.625% coupon reflecting the current pricing environment for Gulf bank capital paper.