Saudi Arabia closes July sukuk issuance at $856m
RIYADH: Saudi Arabia completed its riyal-denominated sukuk issuance for July at SR3.21 billion ($855.7 million), according to the National Debt Management Center.
The level once again remained above SR3 billion, following a June issuance level of SR4.4 billion, SR3.23 billion in May, SR7.39 billion in April, and SR4.4 billion in March.
NDMC revealed that the Shariah-compliant debt product in July was divided into five tranches.
The first tranche is valued at SR612 million and is set to mature in 2029, while the second amounted to SR159 million maturing in 2031.
The third tranche’s value stood at SR961 million, maturing in 2034, and the fourth was a SR1.25 million tranche with a maturity date in 2036.
The fifth tranche had a size of SR226 million maturing 2039.
This is part of the Kingdom’s Sukuk Issuance Program, which started in 2017, with the aim of establishing an unlimited riyal-denominated sukuk initiative under the NDMC.
The announcement from NDMC came as Kuwait’s financial center Markaz published its own figures for bond and sukuk issuance across the Gulf Cooperation Council region for the first half of 2024.
The analysis showed that Saudi Arabia was the leading player in the six months to the end of June, raising $37 billion through 44 issuances.
A report released by S&P Global in April said that sukuk issuance globally is expected to hover between the $160 billion to $170 billion mark in 2024, holding steady compared to the $168.4 billion seen in 2023 and $179.4 billion in 2022.
According to the US-based firm, the issuance of this Shariah-compliant debt product began on a “strong footing” in 2024, with Saudi Arabia becoming a key contributor to the performance.
The credit rating agency also noted that the sukuk market will continue to grow in the near term driven by financing needs in core Islamic finance countries, along with the ongoing economic transformation programs which are currently underway in nations like Saudi Arabia.
It added: “The drop in issuance volumes in 2023, which mainly resulted from tighter liquidity conditions in Saudi Arabia’s banking system and Indonesia’s lower fiscal deficit, was somewhat compensated by an increase in foreign currency-denominated sukuk issuance.”
In April, another report released by Fitch Ratings also echoed similar views and noted that global sukuk issuance is expected to continue growing in the coming months of this year.
Fitch noted that economic diversification efforts and the rapid development of the debt capital market in the Gulf Cooperation Council region will propel the growth of the sukuk market in the coming months.
