RIYADH: Saudi Arabia completed its riyal-denominated sukuk issuance for July at SR3.21 billion ($855.7 million), according to the National Debt Management Center.
The level remained above SR3 billion again, with issuance of SR4.4 billion in June, SR3.23 billion in May, SR7.39 billion in April, and SR4.4 billion in March.
NDMC disclosed in July that it has divided the Shariah-compliant loan product into five phases.
The first tranche is valued at SR612 million and is set to mature in 2029, while the second tranche of SR159 million will mature in 2031.
The third tranche was valued at SR961 million, maturing in 2034, and the fourth tranche was a SR1.25 million tranche with a maturity date in 2036.
The size of the fifth tranche was SR 226 million maturing in 2039.
This is part of the state's sukuk issuance program, which was launched in 2017, with the aim of establishing an unlimited riyal-denominated sukuk initiative under the NDMC.
The announcement from NDMC came as Kuwait's financial center Markaz published its own data on bond and sukuk issuance in the Gulf Cooperation Council region for the first half of 2024.
Saudi Arabia was the leading player, raising $37 billion through 44 issuances in the six months to the end of June, the analysis showed.
A report released in April by S&P Global said global sukuk issuance is expected to be between the $160 billion and $170 billion mark in 2024, stable from $168.4 billion seen in 2023 and $179.4 billion in 2022.
According to the US-based firm, it started on a “strong basis” in 2024 to issue Sharia-compliant debt products, with Saudi Arabia remaining a key contributor to performance.
The credit rating agency also noted that the sukuk market will continue to grow in the near term, driven by financial needs in core Islamic finance countries as well as economic transformation programs currently underway in countries such as Saudi Arabia.
It added: “The continued decline in volume in 2023, which was mainly due to tighter liquidity conditions in Saudi Arabia's banking system and lower fiscal deficit in Indonesia, was partially compensated by an increase in foreign currency-based sukuk issuance.”
In April, another report released by Fitch Ratings echoed similar views and predicted global sukuk issuance in the coming months of this year.
Fitch noted that economic diversification efforts and the rapid development of debt capital markets in the Gulf Cooperation Council region will encourage the growth of the sukuk market in the coming months.
