RIYADH: Saudi Arabia has completed its July riyal-denominated Sukuk issuance worth SR3.21 billion (USD855.7 million), according to the National Debt Management Center.
The amount remained above SR 3 billion again, following issuances of SR 4.4 billion in June, SR 3.23 billion in May, SR 7.39 billion in April and SR 4.4 billion in March.
NDMC announced that the Shariah-compliant debt product was divided into five tranches in July.
The first tranche is valued at SR 612 million and matures in 2029, while the second tranche is valued at SR 159 million and matures in 2031.
The value of the third tranche was SR 961 million and matured in 2034, and the fourth tranche was a SR 1.25 million tranche with a maturity date in 2036.
The fifth tranche had a volume of SR 226 million and was due in 2039.
This is part of the Kingdom’s Sukuk issuance programme, which was launched in 2017 with the aim of establishing an unlimited riyal-denominated Sukuk initiative under the NDMC.
The NDMC's announcement came as Kuwait's financial hub Markaz released its own figures on bond and sukuk issuance across the Gulf Cooperation Council region for the first half of 2024.
The analysis found that Saudi Arabia was the leading player in the six months to the end of June, raising $37 billion from 44 issues.
According to a report published by S&P Global in April, global Sukuk issuance is expected to be between $160 billion and $170 billion in 2024, stable compared to $168.4 billion in 2023 and $179.4 billion in 2022.
According to the US company, the issuance of this Shariah-compliant debt began in 2024 on a “strong foundation”, with Saudi Arabia making a significant contribution to the performance.
The rating agency also noted that the Sukuk market will continue to grow in the near future due to financing needs in major Islamic finance countries as well as ongoing economic transformation programs currently being implemented in countries such as Saudi Arabia.
It continues: “The decline in issuance volume in 2023, mainly due to tighter liquidity conditions in the Saudi banking system and Indonesia’s lower fiscal deficit, was partially offset by an increase in the issuance of foreign currency denominated sukuk.”
Another Fitch Ratings report published in April took a similar view, noting that global sukuk issuance is expected to continue to increase in the coming months of this year.
Fitch noted that economic diversification efforts and rapid debt market development in the Gulf Cooperation Council region will drive growth in the Sukuk market in the coming months.
