Saudi Real Estate Refinance Company issues SAR 2bln Sukuk

Under its existing Sukuk Programme, to increase its support for home ownership in the Kingdom of Saudi Arabia

  • New funding raised will enable mortgage originators to provide lower mortgage rates and support the housing market, making borrowing more accessible to buyers
  • Issuance helps to deepen Saudi capital markets under Financial Sector Development Program  

Riyadh, Saudi Arabia: – Saudi Real Estate Refinance Company (SRC) successfully completed issuing a SAR 2 billion Sukuk to support lenders in the housing market, with the aim to further expand home ownership by making it more affordable. The Sukuk was guaranteed by the Kingdom of Saudi Arabia through the Ministry of Finance.

The 10-year Sukuk was issued at a competitive fixed profit rate of 3.04% marketed to Saudi institutional investors, the deal was oversubscribed 2.5 times

Fabrice Susini, CEO of SRC, which is wholly owned by the Public Investment Fund (PIF), said: “The very positive reception in the market for our Sukuk demonstrates strong confidence in the Saudi housing market and economy, and robust investor support for our business model as home ownership continues to increase. The funding raised will enable us to expand our relationships with home finance lenders, as Saudi Arabia moves closer to its target of achieving 70% home ownership among Saudi nationals by 2030.”

“Our latest Sukuk issuance also adds further depth to the Saudi fixed income market in line with the goals of the Financial Sector Development Program (FSDP) as part of Vision 2030.”

SRC’s new series of Sukuk was issued under its SAR 10 billion Sukuk Programme established earlier this year, under which SRC has the ability to issue sovereign-guaranteed instruments targeting local investors. Its first Sukuk offerings under the programme were issued in March 2021 in two tranches of 7 and 10-years totaling SAR 4 billion.

SRC’s refinancing activities for lenders helps develop an active secondary home financing market in the Kingdom which supports the efficiency and stability of the primary housing market.

The lead coordinator for the transaction was HSBC Saudi Arabia and the joint lead managers were AlJazira Capital, Al Rajhi Capital, Riyad Capital, Saudi Fransi Capital, and SNB Capital.


About Saudi Real Estate Refinance Company (SRC):

Fully owned by the Public Investment fund (PIF), the Saudi Real Estate Refinance Company (SRC) was established in 2017, after obtaining a license to operate in the secondary real estate market by the Saudi Central Bank, with the goal of transforming the local housing market.

SRC enables individuals and entities interested in direct or indirect real estate financing to increase and diversify origination of long-term fixed-rate (LTFR) products.

As one of its primary roles, SRC provides banks and real estate finance companies with liquidity or capital relief, enabling growth in the home financing sector to increase home ownership rates among Saudi citizens. SRC will subsequently aggregate and packages home financing portfolios into mortgage-backed securities to be sold to domestic and international investors.

With a world class management team drawing from international best practice, SRC is uniquely positioned to become the partner of choice for banks and non-bank lenders in the Kingdom.

SRC is rated ‘A’ (stable) by Fitch Ratings and ‘A2’ (stable) by Moody’s Investors Service.

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Saudi Real Estate Refinance Company (SRC)                                                                                                           

Joann Joseph, Instinctif Partners
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