RIYADH: Saudi Arabia completed a riyal-denominated sukuk issuance worth 3.21 billion riyals ($855.7 million) in July, according to the National Debt Management Center.
The issuance level in June was SR4.4 billion, the issuance level in May was SR3.23 billion, the issuance level in April was SR7.39 billion, and the issuance level in March was SR4.4 billion, maintaining the level above SR3 billion again.
The NDMC said in July that Sharia-compliant debt products were divided into five categories:
The first instalment, worth SR612 million, matures in 2029, while the second instalment, worth SR159 million, matures in 2031.
The third instalment is worth SR961 million and is due in 2034, and the fourth instalment is worth SR1.25 million and is due in 2036.
The fifth instalment is due in 2039 and will amount to 226 million riyals.
It is part of Saudi Arabia’s Sukuk issuance program that began in 2017 and aims to establish an unlimited riyal-denominated Sukuk initiative under the NDMC.
NDMC's announcement comes after Kuwait's financial centre Markaz released its own figures for bond and sukuk issuances in the Gulf Cooperation Council region in the first half of 2024.
The analysis found that Saudi Arabia led the way, raising $37 billion through 44 bond issues in the six months to the end of June.
According to a report released by S&P Global in April, global sukuk issuance is expected to be between $160 billion and $170 billion in 2024, unchanged from $168.4 billion in 2023 and $179.4 billion in 2022.
According to the U.S. company, the issuance of this Sharia-compliant debt instrument was launched on a “strong footing” in 2024, with Saudi Arabia being a key contributor to the performance.
The rating agency also said the sukuk market will continue to grow in the short term, supported by funding needs from key Islamic finance countries and ongoing economic transformation programs in countries such as Saudi Arabia.
“The decline in issuance in 2023 was primarily driven by tighter liquidity conditions in the Saudi Arabian banking system and a narrowing fiscal deficit in Indonesia, but was offset to some extent by increased issuance of foreign-currency denominated sukuk,” the report added.
Another report from Fitch Ratings in April echoed similar views, saying it expected global sukuk issuances to continue to grow in the coming months this year.
Fitch said the sukuk market will grow in the coming months driven by economic diversification efforts in the Gulf Cooperation Council region and rapid development of debt capital markets.
