TLDR:
Saudi raises over $2 billion in sukuk
Multi-tranche sukuk denominated in riyals
Largest tranche matures in 2039
RIYADH (The Thursday Times) — Saudi Arabia successfully raised over SAR 7.8 billion through its latest sukuk issuance under the Saudi Arabian Government’s SAR-denominated Sukuk Program. The issuance is split into five tranches, with maturities ranging from 2029 to 2039. This sukuk issuance, denominated in Saudi riyals, comes amidst a fluctuating global sukuk market, reflecting both the kingdom’s robust financial strategy and the continued demand for Islamic finance products.
Five tranches define Saudi’s sukuk issuance
Saudi Arabia’s October 2024 sukuk offering was divided into five distinct tranches, each set with different maturity dates. The first tranche, valued at SAR 823 million, will mature in 2029, while the second, valued at SAR 320 million, has a longer maturity date set in 2031. The subsequent tranches display larger allocations: the third tranche, worth SAR 2.18 billion, will mature in 2034, while the fourth tranche, valued at SAR 1.437 billion, is set to mature in 2036. The fifth and final tranche, worth SAR 3.07 billion, holds the longest maturity date, set to expire in 2039.
Islamic finance amid global sukuk issuance trends
This sukuk issuance follows a year where global sukuk volumes saw a decline, largely driven by tighter liquidity in Saudi Arabia and lower fiscal deficits in Indonesia. However, despite the slowdown, the overall sukuk market is expected to witness a resurgence, with estimates projecting total issuance to range between $160 billion to $170 billion by the end of this year. This uptick follows S&P’s forecast earlier in 2023, which placed last year’s sukuk issuance at $168.4 billion. A comparison with the previous year, 2022, saw global sukuk issuance hitting $179.4 billion, indicating both resilience and fluctuation in the market.
A closer look at 2024 sukuk issuance
The sukuk market, though slightly volatile in the past year, continues to show signs of recovery, especially in foreign currency sukuk issuances. From January to June 2024, global sukuk issuance reached $91.9 billion, a modest increase from the $91.3 billion recorded during the same period in 2023. Notably, foreign currency sukuk issuance saw a significant jump of nearly 24% in the first half of this year, rising from $26.4 billion to $32.7 billion. This demonstrates the ongoing demand for sukuk products in various markets and underscores the critical role of foreign currency issuance in driving the global Islamic finance sector forward.
Saudi Arabia’s National Debt Management Centre
The issuance is managed by the Saudi National Debt Management Centre (NDMC), which plays a key role in overseeing the country’s debt strategies and management. By facilitating the issuance of sukuk, the NDMC supports Saudi Arabia’s broader economic vision while ensuring the kingdom remains competitive in the global Islamic finance market. This issuance aligns with the centre’s broader goals to strengthen the domestic debt market while contributing to the Saudi Vision 2030 initiative, which seeks to diversify the country’s economy beyond oil and into sectors like finance.
