Saudi Arabia’s National Debt Management Center (NDMC) announced the conclusion of riyal-denominated sukuk issuance for December 2023. The total volume of issuances reached approximately SAR14.125 billion. The allotment was set at SAR10.553 billion.
Size of issuances
The center stated that the issuances were divided into two tranches. The size of the first tranche amounted to SAR2.579 billion for sukuk maturing in the year 2030. Meanwhile, the second tranche amounting to SAR7.973 billion for sukuk maturing in the year 2035.
“This issuance confirms the NDMC’s statement on the mid of February 2023, that NDMC will continue, in accordance with the approved Annual Borrowing Plan, to consider additional funding activities subject to market conditions and through available funding channels locally or internationally,” the center stated in the statement. It also depends on market conditions to strengthen the Kingdom’s presence in debt markets and manage principal receivables for the coming years. Saudi Arabia also takes into account market developments and risk management in the government debt portfolio.
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Sukuk market
The global sukuk market showed great positivity in 2023, especially after the growth it achieved in the first half of the year. This growth was driven by the Kingdom’s issuances and a small number of new issuers.
Saudi Arabia has launched several local and international issues of sukuk since the beginning of this year. In May, it entered international debt markets by selling sukuk in two tranches. It offered U.S. dollar bonds for 6 and 10 years. It also received bids worth more than $17 billion for this issuance.
In addition, last April, the Saudi Electricity Company completed the issuance of two tranches of sukuks. This issuance included green and ordinary sukuks worth $2 billion.
Moreover, Saudi Arabia is seeking to stimulate local sukuks and encourage exporters to list sukuks and bonds in the Saudi debt market. Therefore, the Saudi Capital Market Authority took a pivotal incentive by canceling its share of the sukuk and bonds trading commission starting May.
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