Saudi Electricity Gains Outpace GCC on Scarcity

Saudi Electricity Co.’s Islamic bonds returned 67 percent more than Persian Gulf corporate sukuk, buoyed by a scarcity of Shariah-compliant securities in Saudi Arabia and demand for investmentgrade debt.

The state-controlled utility’s 4.211 percent dollar-denominated notes maturing in April 2022 have gained 9.5 percent since their debut at the end of March. That compares with a 5.7 percent return on corporate sukuk from the six-nation Gulf Cooperation Council, the HSBC/Nasdaq Dubai GCC Corporate US Dollar Sukuk Index shows. The yield on the Saudi Electricity’s notes dropped to a record 3.1 percent Aug. 7. The kingdom’s largest power producer is rated the fourth-best investment grade at Standard & Poor’s.

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