Arab News, Thursday, Mar 14, 2019 | Rajab 7, 1440
Saudi Real Estate Refinance Co. issues $200m sukuk
Government-owned Saudi Real Estate Refinance Co. (SRC) said on Wednesday
it had completed a 750-million-riyal ($200 million) sukuk issue with multiple
tenors, the first transaction by a non-sovereign issuer in Saudi Arabia in 2019.
The issuance comes under a program SRC established in December that allows it to
issue up to 11 billion riyals of local currency-denominated Islamic bonds.
SRC, a wholly owned subsidiary of the kingdom’s sovereign wealth fund (PIF),
aims to accelerate housing construction — a sensitive social issue and a top
objective of economic reforms — by injecting liquidity into the real estate
Its target is to eventually refinance 20 percent of Saudi Arabia’s primary home
loans market, which authorities hope to expand to 500 billion riyals by 2020 and
800 billion riyals by 2028. Real estate financing hit 4.7 billion riyals in
The company mandated HSBC Saudi Arabia as sole lead manager and bookrunner of
the sukuk program.
The program may help the company become a major issuer in Saudi Arabia’s
domestic bond market. Increasing activity in that market is another goal of
Saudi Arabia’s housing minister said last week he expected investments in the
real estate financing sector to reach between 60 billion riyals and 80 billion
riyals in 2019.