RIYADH: Saudi Arabia’s National Debt Management Center has closed the issuance of SR4.699 billion ($1.25 billion) riyal-denominated sukuk in December, according to a recent statement.
The total value of bids stood at SR11.08 billion, NDMC said in a statement.
The sukuk offering was divided into two tranches. The first tranche was SR4.09 billion, maturing in 2032; the second was SR605 million, peaking in 2037.
Sukuk, also called an Islamic bond, is a debt product issued according to Shariah or Islamic laws.
This month’s NDMC’s riyal-denominated Sukuk Program portrayed a closing of SR2.208 billion less than in November.
Last month’s program closed the issuance of SR6.907 billion, which also came in two tranches.
The first tranche recorded SR5.572 billion maturing in 2030, while the second was SR1.035 billion, offering returns in 2034.
The Saudi Finance Ministry established the program through NDMC in July 2017 amid rising demand for international and domestic fixed-income markets that provide safe and guaranteed returns.
Saudi Arabia’s cumulative public debt stood at SR966.5 billion by the end of the second quarter of 2022, according to data from the Ministry of Finance.
The aggregate public debt consisted of SR604.8 billion in domestic debt and SR361.8 in external debt.
Public debt in the Kingdom saw an SR7.9 billion increase from the first quarter to the second quarter of this year, according to data compiled by Arab News.
Findings by Refinitiv, a London Stock Exchange Group business, in its 2022 study on sukuk perception and forecast indicate the Kingdom is among the top sovereign sukuk issuance centers in the Gulf region, a leading core market in the first half of this year.
The findings also showed that Saudi Arabia, Malaysia, and Indonesia persisted as the largest issuance bases for sukuk in the first half of 2022, which together made up 75 percent of global sukuk issued in 2021 as well as the first half of 2022.
The Kingdom’s aggregate sukuk raised in the first six months of this year reached $28.1 billion, compared with $24.2bn in the same period a year before despite recent oil-price surges.
“Despite a strong start to the year, issuance momentum slowed as the Federal Reserve and other central banks kicked off a global monetary tightening cycle. The surge in oil prices also contributed to the slowdown in issuance, as it reduced government borrowing needs in core sukuk markets,” said Mustafa Adil, head of Islamic Finance in Refinitiv.
