RIYADH: Saudi Arabia’s National Debt Management Center raised SR7.83 billion ($2.09 billion) through its riyal-denominated sukuk issuance in October, a sharp 201 percent increase from the previous month.
In September, the issuance totaled SR2.60 billion.
This marks a continuation of the Kingdom’s strong activity in the sukuk market, following SR6.01 billion in August, SR3.21 billion in July, and SR4.4 billion in June.
Sukuk, or Islamic bonds, are Shariah-compliant financial instruments that offer investors partial ownership in an issuer’s assets.
The increase in Saudi Arabia’s sukuk issuance aligns with a broader trend highlighted by Moody’s, which noted in September that global sukuk markets are on track for a robust 2024, with issuance volumes expected to exceed 2023 levels despite a slowdown in the second half of the year.
S&P Global also projected that global Shariah-compliant bond issuance could reach between $200 billion and $210 billion this year, up from just under $200 billion in 2023.
According to a statement released by NDMC, the October issuance was divided into five tranches, with the first valued at SR823 million, maturing in 2029.
The second tranche totaled SR320 million, set to mature in 2031, while the third was SR2.18 billion, maturing in 2034.
The fourth tranche, worth SR1.43 billion, matures in 2036, and the fifth, valued at SR3.07 billion, is set to mature in 2039.
Earlier this month, Fitch Ratings noted that sukuk issuances globally are rising on improved financing conditions followed by the US Federal Reserve’s rate cuts to 5 percent in September.
The US-based agency said that interest rates are expected to be 4.5 percent and 3.5 percent by the end of 2024 and 2025, respectively, resulting in a boost in sukuk issuances in the short term.
Fitch added that outstanding global sukuk reached $900 billion by the end of the third quarter of 2024, an 8.5 percent increase year-on-year.
In a separate August report, Fitch highlighted the UK’s position as a key center for Islamic finance, with the London Stock Exchange ranking as the third-largest listing venue for US dollar-denominated sukuk globally.
