The National Debt Management Center (NDMC) of Saudi Arabia has successfully completed its sukuk issuance for the month of June, raising a total of $667 million. The riyal-denominated sukuk program received a bid amount of SR2.5 billion ($667 million), with a total allocation of SR7.43 billion.
The sukuk issuance was divided into two tranches. The first tranche amounted to SR622 million maturing in 2030, while the second tranche was valued at SR1.84 billion maturing in 2035, as stated by the NDMC in a recent statement. Sukuk, also known as Islamic bonds, are debt instruments issued in compliance with Shariah or Islamic laws.
The successful completion of the sukuk issuance reflects the NDMC’s commitment to its Annual Borrowing Plan, as announced in February. The NDMC aims to ensure the Kingdom’s continuous presence in debt markets and effectively manage debt repayments in the coming years while considering market conditions and the risk management of the government debt portfolio.
According to a report by S&P Global released in January, global sukuk issuances are expected to decline in 2023. It is projected to reach approximately $150 billion, compared to $155.8 billion in 2022 and $170.4 billion in 2021. This trend is influenced by various factors, including market conditions and economic dynamics.
The successful sukuk issuance by the NDMC demonstrates the continued investor confidence in Saudi Arabia’s debt market and reflects the Kingdom’s commitment to prudent debt management practices. The proceeds from the sukuk issuance will contribute to meeting the government’s financing requirements and supporting its strategic initiatives.
The NDMC plays a crucial role in overseeing Saudi Arabia’s debt management strategies, ensuring the stability and sustainability of the country’s fiscal position. By diversifying funding sources and engaging in sukuk issuances, the NDMC contributes to the development and deepening of the Islamic finance market in the Kingdom.
The NDMC’s proactive approach in tapping into local and international funding channels underscores its commitment to adapt to market conditions and optimize debt management strategies. As the global sukuk market evolves, the NDMC remains dedicated to exploring opportunities and aligning with market trends to maintain Saudi Arabia’s position as a leading player in the debt market.
The successful closure of the June sukuk issuance further reinforces Saudi Arabia’s strong financial standing and its ability to access capital markets effectively. The Kingdom’s commitment to fiscal prudence and debt management practices contributes to its overall economic stability and resilience.
As Saudi Arabia continues its efforts to diversify its economy and reduce its reliance on oil revenues, effective debt management remains a key pillar in ensuring sustainable economic growth. The NDMC’s consistent and strategic sukuk issuances support the Kingdom’s long-term financial objectives and strengthen investor confidence in Saudi Arabia’s debt market.
In conclusion, the National Debt Management Center’s successful conclusion of the June sukuk issuance, raising $667 million, highlights Saudi Arabia’s commitment to prudent debt management and its ability to access capital markets. The sukuk program contributes to the Kingdom’s financing needs and supports its strategic initiatives, while also promoting the growth of the Islamic finance market. Through proactive debt management strategies, Saudi Arabia aims to maintain its fiscal stability and drive sustainable economic development.
