Saudi plans new sukuk worth $9.6 bn

Following early purchase of $9.52 bn debt
Saudi plans new sukuk worth $9.6 bn
New instruments to help boost Saudi's domestic

Saudi Arabia plans to issue a new sukuk, valued at $9.57, the National Debt Management Center (NDMC) announced recently.

According to the NDMC, the new sukuk issuance would be done in tranches. The first tranche is maturing in 2031, amounting to $2 bn. This will be followed by a sukuk that will mature in 2032, valued at $3.9 bn.

The third tranche, valued at $2.9 bn will mature in 2033. The last tranche, amounting to $850 mn, is maturing in 2038.

Early debt purchase

The issuance of the sukuk follows a successful completion of an early purchase of Saudi’s outstanding debt worth $9.52 bn.

The NDMC said the outstanding debt instruments were maturing in 2024, 2025 and 2026. Moreover, it revealed the transaction was the largest ever early purchase it has facilitated.

NDMC is undertaking these initiatives to strengthen the domestic market as well as to keep up with market developments. These have largely had a positive impact on growing the trading volume in the secondary market.

Read: Saudi’s sukuk issuance draws massive $17 bn in requests

Saudi economic diversification

Further, this initiative enables the NDMC to exercise its role in managing the government debt obligations and its future maturities. This will also enhance NDMC’s efforts to strengthen the public finance in the medium and long term.

From a broader perspective, NDMC’s efforts are in light with Saudi Arabia’s economic diversification initiatives as part of its Vision 2030 strategy.

The NDMC appointed HSBC Saudi Arabia, AlRajhi Capital, SNB Capital, and AlJazira Capital as Joint Lead Managers to lead the transaction.

Global sukuk market

Refinitiv’s Navigating a New Environment report projected global sukuk issuance would grow at an estimated compound annual growth rate of 6.8 percent over the next five years, reaching $257 bn in 2027.

Moreover, it said that Malaysia, Saudi Arabia and Indonesia were the largest issuance bases for sukuk. Combined, the sukuk issued in these countries made up 75 percent of sukuk issued in 2021 and the first half of 2022.

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