Arab News, Thurs, Nov 23, 2023 | Jumada I 9, 1445
KSA closes November Sukuk
issuance at $710m
RIYADH:
Saudi Arabia’s National Debt Management Center has closed the November issuance
of its riyal-denominated sukuk program, with a bid amount totaling SR2.66
billion ($710 million), representing a decline of 33.16 percent compared to
October.
The November issuance was divided into two tranches, with the first tranche
valued at SR1.99 billion set to mature in 2031 and the second worth SR668
million maturing in 2035.
In October, sukuk issuance amounted to SR3.98 billion, while in September, it
amounted to SR2.45 billion.
“This issuance confirms the NDMC’s statement in 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 said in a
statement.
It added: “This is to ensure the Kingdom’s continuous presence in debt markets
and manage the debt repayments for the coming years while taking into account
market movements and the government debt portfolio risk management.”
Sukuk, which is also called an Islamic bond, is a debt product issued in
accordance with Shariah or Islamic laws.
In August, NDMC took a strategic step of restructuring SR35.7 billion of debt
instruments into four new sukuk tranches featuring longer-term maturities in
2024, 2025 and 2026.
As outlined in a press statement, the initiative aimed to strengthen the
domestic money market and stay up-to-date with its developments.
Even though global sukuk issuances are expected to decline in 2023, particularly
in light of ongoing economic transformation programs, Saudi Arabia’s sukuk
issuance showcases its determination to manage its financial needs effectively.
In August, a report released by Moody’s Investors Service revealed that global
sukuk issuances are expected to decline in 2023, ranging between $150 billion
and $160 billion, from $178 billion in 2022.
In the same month, Ayman Al-Sayari, governor of Saudi Central Bank, revealed
that the Kingdom holds the largest Islamic finance market in the world, with
total assets exceeding SR3.1 trillion.
He added that Saudi Arabia is also the world’s most prominent sovereign sukuk
issuer.
According to Al-Sayari, the total value of the Islamic finance sector currently
stands at SR11.2 trillion, displaying an average growth of 9.6 percent over the
last 3 years.