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The Finance Ministry raised SAR 3.2 bn in its July sukuk issuance, which wrapped up on Tuesday, according to a National Debt Management Center (Ndmc) statement (pdf). This is part of the government’s SAR-denominated sukuk program
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The issuance was structured in five tranches:
- A 5-year tranche valued at SAR 612 mn with a 4.97% yield;
- A 7-year tranche valued at SAR 159 mn with a 5.03% yield;
- A 10-year tranche valued at SAR 961 mn with a 5.13% yield;
- A 12-year tranche valued at SAR 1.3 bn with a 5.18% yield;
- A 15-year tranche valued at SAR 226 mn with a 5.21% yield.
A snapshot of the gov’t debt obligations in 2024: The total remaining debt maturities in 2024 stand at c. SAR 21 bn, down from SAR 40 bn on the back of Ndmc’s “successful execution of liability management transaction in 2023,” according to the center’s annual borrowing plan report for FY 2024 (pdf). The government’s total debt portfolio is expected to reach SAR 1.1 trn by year end.
The macro picture: The budget’s deficit for this year is projected to reach SAR 79 bn, putting our financing needs at around SAR 86 bn. Up to 35% of those needs will be financed through domestic SAR-denominated instruments, while up to 40% is expected to be raised in international markets, and up to 50% through the government alternative funding (GAF) channel. GAF aims at financing the government’s capex and infrastructure projects.
Remember: Ndmc raised USD 5 bn in May with the sale of USD-denominated sukuk in an offering that was 4x oversubscribed. The offering was the “first triple tranche sukuk issuance that is a part of Ndmc’s strategy to diversify the Kingdom’s funding sources and expand the investor base.”
Saudi Arabia led sukuk and bond issuances in the GCC in 1H 2024: Regional issuances (sovereign and corporate) grew 38% y-oy to USD 75.5 bn, with the Kingdom accounting for almost half of these issuances.
