RIYADH: Saudi Arabia’s National Debt Management Center has completed its riyal-denominated sukuk issuance for September at SR2.603 billion ($690 million).
In August, the Kingdom issued sukuk worth SR6.01 billion, up from SR3.21 billion and SR4.4 billion in July and June, respectively.
The decline in sukuk issuances falls in line with a report released by American credit rating agency Fitch Ratings in August, which said that issuances are expected to slow down in the third quarter before picking up later in the year on the back of lower interest rates and oil prices.
Sukuk, also known as Islamic bonds, are a Shariah-compliant debt product through which investors gain partial ownership of an issuer’s assets until maturity.
Establishing an unlimited riyal-denominated Islamic bond initiative under the NDMC is part of the Kingdom’s Sukuk Issuance Program, which started in 2017.
According to a statement released by NDMC, the September issuance was divided into six tranches.
The first tranche was valued at SR255 million and is set to mature in 2027, while the second amounted to SR375 million, maturing in 2029.
The third tranche’s value stood at SR638 million, maturing in 2031, and the fourth was valued at SR1.02 billion, with a maturity date in 2034.
The fifth tranche had a size of SR202 million, maturing in 2036, followed by a sixth tranche valued at SR112 million due in 2039.
Earlier this month, another report released by global credit rating agency Moody’s said that the global sukuk market is poised for a strong performance in 2024, with issuance volumes expected to surpass those of 2023 despite a slowdown in the year’s second half.
According to the US-based firm, the issuance of Shariah-compliant bonds could reach between $200 billion and $210 billion this year, up from just under $200 billion in 2023.
The report said the growth is being fueled by robust sovereign issuance across the Gulf Cooperation Council and Southeast Asia, with Saudi Arabia playing a leading role.
