RIYADH: Saudi Arabia’s National Debt Management Center raised SR5.02 billion ($1.34 billion) through its riyal-denominated sukuk issuance for July, marking a sharp 113.6 percent increase compared to the previous month.
In June, the Kingdom issued sukuk worth SR2.35 billion, while May and April saw issuances of SR4.08 billion and SR3.71 billion, respectively.
Sukuk are Shariah-compliant financial instruments that offer investors partial ownership in an issuer’s underlying assets, making them a popular alternative to conventional bonds.
According to NDMC, the July issuance was divided into four tranches. The first tranche, valued at SR776 million, will mature in 2029. The second, worth SR1.34 billion, is set to mature in 2032, followed by a third tranche of SR823 million due in 2036. The largest tranche, totaling SR2.08 billion, will mature in 2039.
Saudi Arabia’s debt market has witnessed robust growth in recent years, attracting strong investor interest in fixed-income instruments amid a global environment of rising interest rates.
In April, Kuwait Financial Center, also known as Markaz, reported that Saudi Arabia led the Gulf Cooperation Council in primary debt issuances during the first quarter of the year. The Kingdom raised $31.01 billion from 41 offerings, accounting for over 60 percent of total issuances across the region.
Credit rating agency S&P Global noted in April that Saudi Arabia’s expanding non-oil sector and steady sukuk issuance volumes are likely to support the growth of the global Islamic finance industry.
The agency forecasts global sukuk issuance to reach between $190 billion and $200 billion in 2025, with foreign currency-denominated offerings contributing up to $80 billion, assuming market conditions remain stable.
Echoing that outlook, a report by Kamco Invest published in December said Saudi Arabia is expected to account for the largest share of bond maturities in the GCC between 2025 and 2029, with $168 billion set to mature during the period.
Earlier this month, S&P Global reiterated its positive view, stating that the global sukuk market is on track to maintain its momentum in 2025, with foreign currency-denominated issuances projected to reach between $70 billion and $80 billion.
Source: www.arabnews.com