Bank AlJazira to redeem 2 billion riyals of Tier 2 sukuk
Bank AlJazira will redeem its entire 2 billion riyal Tier 2 sukuk issue early
· Last verified: 10 Nov 2026 (Saudi Exchange (Tadawul) — Bank AlJazira disclosure)
Summary
- Bank AlJazira will redeem its entire 2 billion riyal Tier 2 sukuk issue early
- The sukuk were issued in December 2021 with a ten-year maturity running to 2031
- Full redemption at par signals what holders of similar Saudi bank issues can expect
The latest
Bank AlJazira said it intends to call its 2 billion riyal Tier 2 sukuk in full at par value on 8 December 2026, the first call date under the instrument's terms, five years into a ten-year tenor. The bank said regulatory approvals for the redemption have been obtained. The outstanding value of the issue after redemption will be zero.
Details
- The instrument: According to the Saudi Exchange disclosure, the paper is a Saudi riyal-denominated Tier 2 sukuk trading under symbol 1250, listed as Bank AlJazira Tier 2 Sukuk 12/2031. Tier 2 instruments count toward a bank's regulatory capital base and typically carry long maturities with issuer call options built in.
- The numbers: The bank said the redeemed amount totals 2,000,000,000 riyals, representing 100% of the total issue. The disclosure put the number of sukuk being redeemed at 2,000, each with a nominal value of 1,000,000 riyals at redemption, based on the minimum denomination and total size.
- The timeline: The sukuk were issued on 8 December 2021, corresponding to 4/5/1443 in the Hijri calendar, with an original ten-year tenor maturing on 8 December 2031. The call is being exercised at the end of the fifth year, cutting the instrument's actual life in half.
- The mechanism: Under the terms and conditions of the sukuk, Bank AlJazira is permitted to call the instrument on the periodic distribution date falling on 8 December 2026. The disclosure said the bank has obtained the necessary regulatory approvals for the redemption.
- What holders receive: The bank said the redemption amount will be paid along with any accrued and unpaid periodic distributions, by Bank AlJazira or on its behalf, to the relevant sukuk holders on 8 December 2026, in accordance with the instrument's terms and conditions.
- Trading and settlement: The sukuk will cease trading on the redemption date, 28/6/1448 in the Hijri calendar, corresponding to 8 December 2026. Funds are scheduled to be deposited in holders' accounts on the same date. Total issue value after redemption drops to zero.
- Not disclosed: The announcement did not state whether the bank plans a replacement Tier 2 issuance, nor did it give the profit rate carried by the sukuk or the reasoning behind exercising the call at the first available opportunity.
Background
Tier 2 sukuk are subordinated capital instruments Saudi banks have used extensively since 2021 to strengthen regulatory capital. Most are structured as ten-year paper callable at the five-year mark, leaving the exercise decision with the issuer rather than the holder.
Between the lines
Calling at the first opportunity, at full par value and with regulatory sign-off already secured, sets a reference point for the market: holders of comparable Saudi bank Tier 2 issues from the 2021 vintage now have a live precedent for an issuer taking the five-year exit rather than carrying the paper to 2031. The absence of any stated refinancing plan leaves the capital replacement question open.
What's next
The 8 December 2026 call date is the operative deadline: trading halts, redemption funds settle in holders' accounts, and any accrued distributions are paid. Watch for a follow-up disclosure on replacement Tier 2 issuance.