Saudi finance chiefs welcome Moody’s sukuk rating

Finance Minister Mohammed Al-Jadaan said the rating reflected “the strength, flexibility and capability of the Kingdom’s economy in facing global economic challenges”

  
Islamic finance. Image used for illustrative purpose.

Islamic finance. Image used for illustrative purpose.

Getty Images

LONDON: Saudi finance chiefs have welcomed the latest ratings agency stamp of approval for the Kingdom’s sukuk program.

Moody’s this week assigned a top rating to the government’s Riyal-denominated Islamic bond program.

Such ratings are used by investors to gauge the creditworthiness of countries and companies.

Moody’s issued a provisional (P) A1 senior unsecured MTN global scale rating and Aaa.sa senior unsecured national scale rating to the government’s sukuk program.

Finance Minister Mohammed Al-Jadaan said the rating reflected “the strength, flexibility and capability of the Kingdom’s economy in facing global economic challenges.”

Gulf states including Saudi Arabia are selling Islamic bonds, also known as sukuk, to help fund public spending and infrastructure projects amid weaker oil prices and the ongoing economic fallout from the coronavirus pandemic.

National Debt Management Center CEO Fahad Al-Saif, said that the move by Moody’s showed “the depth of the local debt market by providing a risk-free yield curve.”

The introduction of the national scale rating is expected to further attract foreign investors in the local debt capital market, he said.

Credit rating reports for domestic issuances are opinions on the creditworthiness of public and private issuers as well as financial obligations related to other issuers within a country.

The credit rating of domestic issuances deals with the relative risk within a country (relative to the Sovereign issuance rating), while the credit rating of international sukuk sakes is based on a cross-country comparison.

Copyright: Arab News © 2020 All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

Disclaimer: The content of this article is syndicated or provided to this website from an external third party provider. We are not responsible for, and do not control, such external websites, entities, applications or media publishers. The body of the text is provided on an “as is” and “as available” basis and has not been edited in any way. Neither we nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this article. Read our full disclaimer policy here.

More From Islamic Finance