Alinma Bank intends to issue additional tier-one perpetual capital sukuk denominated in US dollars, Al-Eqtisadiah reported on August 25.

The move comes as Saudi banks seek to strengthen their capital positions amid continued growth in the kingdom's banking sector. Sukuk, or Islamic bonds, comply with sharia principles and have become increasingly popular funding instruments for Middle Eastern financial institutions.

The Saudi lender said in a statement to the Tadawul stock exchange that the sukuk issuance aims to improve tier-one capital alongside general banking purposes. The bank will determine the value and terms of the additional tier-one perpetual capital sukuk according to market conditions.

The issuance is expected to be conducted through a special purpose vehicle via a directed offering to qualified investors both inside and outside Saudi Arabia.

Alinma has appointed Abu Dhabi Islamic Bank PJSC, Alinma Investment Company, Dubai Islamic Bank PJSC, Emirates NBD Bank PJSC, Goldman Sachs International, J.P. Morgan Securities PLC and Standard Chartered Bank as joint lead managers for the potential offering.

The bank clarified that the announcement does not constitute an invitation or offer to purchase, own or subscribe to any securities, and remains subject to the terms and conditions of the additional tier-one perpetual capital sukuk.

Alinma said it will announce any other material developments to shareholders in due course, according to relevant regulations and rules.

Alinma Bank, established in 2006, is one of Saudi Arabia's Islamic banks and has been expanding its operations across the kingdom in recent years.