The aggregate capital expenditure (capex) of publicly listed Saudi corporates will reach $85-$95 billion over 2025-2027, translating into increased corporate lending demand and cross-border issuance, according to S&P Global Ratings.

Between 2017 and mid-October 2025, Saudi non-financial corporates have issued about $78.6 billion in foreign-currency debt, with Aramco as the largest issuer in Saudi Arabia, having issued $43 billion, the rating agency said in a new report.

“Large Saudi corporates are strategically diversifying their funding base by reaching out to global investors, while extending their maturity profiles. We view these developments as credit supportive, but we will monitor whether the accumulation of debt from these investments outpaces earnings generation,” S&P said.

Close to 90% of the projected aggregate capex relates to spending by companies that are, directly or indirectly, owned by state-owned entities (SOEs), such as the Public Investment Fund (PIF) and the General Organization for Social Insurance.

Higher funding requirements will continue to spur corporate capital market activity, the report said.

S&P anticipates that Saudi banks will extend about $65-$75 billion in new corporate loans annually over 2025-2026, primarily to the real estate and utilities sectors. The amount of new corporate loans increased by almost $60 billion between December 31, 2024, and August. 31, 2025.

“While some investments might be financed from internally generated cash flows, demand for bank funding will remain strong,” S&P Global Ratings credit analyst Rawan Oueidat added.

PIF’s portfolio companies, as well as Aramco’s, will account for a significant portion of issuances over the next few years, while the number of private-sector entities in the bond market will increase gradually.

The EBITDA margins of companies in the Kingdom will remain resilient over 2025-2027, despite lower oil prices, rising domestic inflation and increasing competition in non-oil sectors, such as consumer goods, she stated.

Credit metrics are likely to remain broadly unchanged due to cost rationalisation efforts, continued capex requirements, and non-oil sectors’ growth plans aligned with Vision 2030 objectives, Oueidat added. 

S&P expects the energy sector will continue to account for most spending, primarily due to large outlays at Saudi Aramco. 

“At the same time, we forecast that non-oil corporates’ capex will remain elevated, in line with Vision 2030 ambitions. Concretely, we expect publicly listed Saudi corporates’ aggregate capex will remain high due to investments within the materials, telecommunications, and utilities sectors,” she stated.

S&P analysis of publicly listed entities showed that corporate leverage remains manageable across most sectors.

“If lending growth exceeds our base-case assumption, this would likely result in a higher but manageable net external debt position for Saudi banks,” S&P Global Ratings credit analyst Zeina Nasreddine said.

Saudi authorities have already launched several initiatives to increase capital market activity and attract overseas funding.  

“Access to a more liquid and deeper international market, a broader investor base, and reduced reliance on domestic liquidity will offer more possibilities to Saudi corporates,” said S&P Global Ratings credit analyst Tatjana Lescova.