RIYADH: Saudi Arabia completed its SR3.21 billion ($855.7 million) riyal-denominated sukuk issuance in July, according to the National Debt Management Center.
The level remained above SR 3 billion again after releases of SR 4.4 billion in June, SR 3.23 billion in May, SR 7.39 billion in April and SR 4.4 billion in March.
The Shariah-compliant debt product was split into five tranches in July, NDMC revealed.
The first tranche is valued at SR 612 million and is due in 2029, while the second was SR 159 million due in 2031.
The value of the third tranche was SR 961 million due in 2034 and the fourth tranche was SR 1.25 million due in 2036.
The fifth tranche was SR 226 million with a maturity date of 2039.
It is part of the Royal Sukuk Program which was launched in 2017 with the aim of creating an uncapped riyal sukuk initiative within NDMC.
The announcement from the NDMC came after Kuwait's Markaz financial center released its own figures on bond and sukuk issuance in the Gulf Cooperation Council region for the first half of 2024.
The analysis showed that Saudi Arabia was the leading player in the six months to the end of June, raising $37 billion through 44 issues.
S&P Global said in a report published in April that global sukuk volume will range between $160 billion and $170 billion in 2024, compared with $168.4 billion in 2023 and $179.4 billion in in 2022.
According to the US firm, issuance of this Sharia-compliant debt product is off to a “strong footing” in 2024, with Saudi Arabia a key enabler.
The credit rating agency also noted that the sukuk market will continue to grow in the near term, driven by the funding needs of major Islamic finance countries, as well as the ongoing economic transformation programs currently underway in countries such as Saudi Arabia.
It added: “The fall in issuance volumes in 2023, which was mainly a result of tighter liquidity conditions in the Saudi Arabian banking system and a smaller budget deficit in Indonesia, was somewhat offset by an increase in issuance of foreign currency-denominated sukuk.”
In April, another report published by Fitch Ratings echoed similar sentiments and noted that global sukuk issuance is expected to continue to grow in the coming months of this year.
Fitch noted that efforts to diversify the economy and the rapid development of the debt capital market in the Gulf Cooperation Council region will drive the growth of the sukuk market in the coming months.
