RIYADH: The Saudi Real Estate Refinance Co., a subsidiary of the Public Investment Fund, has launched the Kingdom’s first residential mortgage-backed securities.
The new asset class is designed to boost liquidity in the housing finance sector and broaden investment opportunities by packaging residential mortgage loans into tradeable securities.
“The launch of the Kingdom’s first RMBS transaction marks a strategic step toward developing Saudi Arabia’s real estate finance market and enhancing its appeal to both domestic and foreign investors,” said Majid Al-Hogail, minister of municipalities and housing and chairman of SRC’s board.
“This initiative provides innovative financing instruments that align with the objectives of Saudi Vision 2030 to raise homeownership rates and enable more Saudi families to own suitable homes, advancing sustainable economic growth and quality of life,” he added.
Executed under a strong regulatory framework, the transaction highlights the Kingdom’s readiness to adopt sophisticated financial instruments, further reinforcing investor confidence.
The move is part of SRC’s mandate to deepen capital markets and support Vision 2030 goals by diversifying the financial sector and expanding homeownership.
Earlier this year, the company completed a $2 billion international sukuk issuance, part of a $5 billion trust certificate program to enhance liquidity and funding sources for housing.
In 2024, SRC signed a memorandum of understanding with global investment firm King Street to explore secondary real estate financing solutions. It also established an international trust certificate issuance platform to attract overseas investors.
SRC CEO Majeed Al-Abduljabbar described the RMBS launch as “a qualitative leap in the development of the Kingdom’s secondary mortgage market,” crediting the achievement to coordination with “the Saudi Central Bank, the Capital Market Authority, the Financial Sector Development Program, the Housing Program, and the Public Investment Fund Program.”
According to Al-Abduljabbar, the securitization will strengthen liquidity, diversify the investor base, and help financial institutions manage capital and risk more effectively.
Established in 2017 and licensed by the Saudi Central Bank, SRC plays a central role in enabling affordable housing finance solutions in line with Vision 2030 targets.
Source: www.arabnews.com