RIYAHD: Saudi Arabia’s sukuk issuance in November closed at SR9.9 billion ($2.6 billion) of bids received, up SR6.2 billion from the previous month, according to the National Debt Management Center.
The Saudi Riyal Local Sukuk Program is one of Saudi Arabia’s financing tools where the Ministry of Finance issues local instruments that are then organized by NDMC and divided into monthly tranches for investors.
NDMC reported that the total amount of all bids received stood at SR9.9 billion in November, up from SR3.13 billion in October and SR7.4 billion in September.
As for the total amount allocated, it was set at SR6.6 billion last month compared to only SR0.7 billion in October and SR1.7 billion in September, showed the data.
Last month’s sukuk issuance was divided into two tranches, or parts of different sizes and maturity dates, as opposed to into three tranches the two preceding months.
The first tranche in November’s issuance marked a size of SR 5.6 billion maturing in 2030, whereas the second a size of SR1 billion maturing in 2034.
October’s three tranches stood at SR0.3 billion, SR0.3 billion and SR0.1 billion with their maturity dates being 2029, 2032 and 2037 respectively.
In addition, September’s tranches recorded SR0.2 billion, SR0.7 billion and SR0.8 billion with maturities of 2027, 2032 and 2037 respectively.
Al Rajhi Banking and Investment Corp., the Kingdom’s largest valued bank, completed the offering and subscription of Tier 1 sukuk denominated in Saudi Riyals, valued at SR10 billion on Tuesday.
The rate of return is reset on Nov. 16, and is reset every five years following the first reset date, according to a bourse filing.
The sukuk allocation is expected to be completed by Nov. 13, and the settlement is scheduled for Nov. 16.
Surplus refunds will be provided to eligible investors on Nov. 16, after which the sukuk will be listed and traded on the Saudi stock exchange, Tadawul
The sukuk issuance continues to stand in line with the statement made by NDMC in May of this year that the organization “will continue, in accordance with the approved Annual Borrowing Plan, to consider additional funding activities subject to market conditions and through available funding channels locally or internationally.”
“This is to ensure the Kingdom's continuous presence in debt markets and manage the debt repayments for the coming years while taking into account market movements and the government debt portfolio risk management.”
