Saudi Arabia has completed its riyal-denominated sukuk issuance for May at SR3.23 billion ($860 million), according to the National Debt Management Center.
In April, Saudi Arabia issued sukuk amounting to SR7.39 billion, while it was SR4.44 billion and SR7.87 billion in March and February respectively.
NDMC revealed that the Shariah-compliant debt product for May was divided into two tranches.
The first tranche valued at SR71 million is set to mature in 2029, while the second one amounting to SR3.16 billion is due in 2036.
In March 2024, NDMC concluded its second government sukuk savings round, with a total volume of requests reaching SR959 million, allocated to 37,000 applicants.
NDMC, at that time, said that the financial product, also known as Sah, offers a return of 5.64 percent, with a maturity date in March 2025.
In April, a report released by S&P Global said that sukuk issuance globally is expected to hover between the $160 billion to $170 billion mark in 2024, representing a steady momentum from $168.4 billion in 2023 and $179.4 billion in 2022.
According to the US-based firm, the issuance of this Shariah-compliant debt product began on a strong footing in 2024, with Saudi Arabia becoming a key contributor to the performance.
The credit rating agency also noted that the sukuk market will continue to grow in the near term driven by financing needs in core Islamic finance countries, along with the ongoing economic transformation programs which are currently underway in nations like Saudi Arabia.
“The market has started 2024 on a strong footing, with total issuance reaching $46.8 billion at March 31, 2024, compared with $38.2 billion at March 31, 2023. Saudi Arabia was a key contributor to this performance,” said S&P Global.
It added: “The drop in issuance volumes in 2023, which mainly resulted from tighter liquidity conditions in Saudi Arabia’s banking system and Indonesia’s lower fiscal deficit, was somewhat compensated by an increase in foreign currency-denominated sukuk issuance.”
In April, another report released by Fitch Ratings also echoed similar views and noted that global sukuk issuance is expected to continue growing in the coming months of this year.
Fitch noted that economic diversification efforts and the rapid development of the debt capital market in the Gulf Cooperation Council region will propel the growth of the sukuk market in the coming months.