Arab News, Thu, Apr 25, 2024 | Shawwal 16, 1445
Saudi Arabia closes April sukuk issuance at $1.97bn
Saudi Arabia:
Saudi Arabia has completed its
riyal-denominated sukuk issuance for April at SR7.39 billion ($1.97 billion),
representing a rise of 66.44 percent compared to the previous month.
The National Debt Management Center revealed that
the Shariah-compliant debt product was divided into three tranches.
The first tranche, valued at SR2.35 billion, is
set to mature in 2029, while the second one amounting to SR1.64 billion is due
in 2031.
The third tranche totaled SR3.51 billion and will
mature in 2036.
“The Kingdom also plans to expand funding
activities during the year 2024, reaching up to a total of SR138 billion from
what has been stated previously in the Annual Borrowing Plan, with a portion of
this amount already covered up to date,” said NDMC in a press statement.
It added: “This step comes with the aim of
capitalizing on market opportunities to achieve proactive financing for the
coming year and utilizing it to bolster the state’s general reserves or seize
additional opportunities to enhance transformative spending during this year,
thereby accelerating strategic projects and programs of Saudi Vision 2030.”
In March, NDMC concluded its second government
sukuk savings round for March, with a total volume of requests reaching SR959
million, allocated to 37,000 applicants.
The center added that the financial product, also
known as Sah, offers a return of 5.64 percent, with a maturity date in March
2025.
Earlier this month, Fitch Ratings, in a report,
said that global sukuk issuance is expected to continue growing in the coming
months of this year, driven by funding and refinancing demands.
The credit rating agency noted that various other
factors like economic diversification efforts by countries in the Gulf
Cooperation Council region and development of the debt capital market will also
propel the growth of the market in the future.
In January, another report released by S&P Global
revealed that sukuk issuance worldwide is expected to total between $160 billion
and $170 billion in 2024, driven by higher financing needs in Islamic nations.
The report noted that higher financing needs in
some core Islamic finance countries and easing liquidity conditions across the
world are two crucial factors which will drive the growth of the market this
year.