Saudi Arabia closes February $840mln sukuk program

The issuance size was fixed at SR3.16 billion ($840 million), the Ministry of Finance said in a statement.

Sukuk issuances were divided into two tranches, with the first of SR1.930 billion set to mature in 2028. The second tranche of SR1.230 billion is scheduled to mature in 2033.

The latest announcement highlights the Kingdom’s growing leadership within the Islamic finance sector, which is set to continue in 2021, an expert told Arab News in January.

“The region, and specifically Saudi Arabia, is leading the Islamic finance market globally,” Fitch Ratings’ Global Head of Islamic Finance, Bashar Al-Natoor, said.

“The Kingdom has previously carried out the largest-ever sukuk offering internationally — we expect this trend to continue,” he said.

In September, the credit ratings agency Moody’s said Islamic financing in Saudi Arabia will account for 80 percent of the Kingdom’s loans in the next 12-18 months, compared with 70 percent in 2013.

Moody’s anticipates a shift to more shariah-compliant finance over the next 12-18 months as corporates and households increasingly use Islamic products.

“A comprehensive set of Islamic finance regulations has spurred Saudi banks to issue sukuk, Islamic products are now listed on the main market, and an Islamic mortgage refinancing businesshas been established,” said Ashraf Madani, VP-senior analyst at Moody’s.

Global Islamic finance assets are forecast to reach $3.69 trillion by 2024, according to a report released in December by the Jeddah-based Islamic Development Bank.

The bank said that global Islamic finance assets increased in value by 14 percent year-on-year to $2.88 trillion in 2019, the highest recorded growth for the industry since the global financial crisis.

According to the report, the top five developed countries in Islamic finance are Malaysia, Indonesia, Bahrain, UAE and Saudi Arabia.