SRC prices first international sukuk issue worth $2B

Logo of Saudi Real Estate Refinance Co. (SRC)

Saudi Real Estate Refinance Co. (SRC), a subsidiary of the Public Investment Fund (PIF), announced the completion of pricing the first government-guaranteed international sukuk worth $2 billion (nearly SAR 7.5 billion).

The issuance, structured in two tranches with maturities of three and 10 years, was oversubscribed six times, reflecting strong demand from more than 300 institutional investors.

The sukuk is part of SRC’s $5 billion international sukuk program that was listed on the London Stock Exchange (LSE) and is backed by strong credit ratings, reinforcing the company’s position as a key player in the global housing finance market.

The issuance will be listed on LSE's International Securities Market (ISM), further enhancing market liquidity and supporting Saudi Arabia’s mortgage finance ecosystem.

Majid Al-Hogail, Minister of Municipalities and Housing and Chairman of SRC, said the successful listing of the international sukuk program on LSE marks a significant milestone in integrating the Saudi economy with global markets, attracting foreign direct investment, enhancing liquidity, and developing the secondary mortgage market in Saudi Arabia.

“The new issuance supports the sustainability of the housing sector and contributes to achieving the objectives of the Housing Program under Saudi Vision 2030 by providing more efficient funding channels,” Al-Hogail noted.

He added that the Kingdom aims to expand the mortgage finance sector by SAR 500 billion by 2030, reaching SAR 1.3 trillion.

"The Kingdom’s mortgage market was approximately SAR 800 billion in 2024, up from SAR 200 billion in 2018. These financings now account for 23% of total bank assets, "the minister said.

This growth is driven by the Kingdom’s mega projects and the objectives of Vision 2030, which set a target homeownership rate of 70% for Saudi families by the end of the decade.

By the end of 2023, homeownership reached 63.7%, surpassing the 63% target, Al-Hogail said. "The successful listing of the international sukuk program on LSE reflects the unwavering support of our wise leadership and reinforces Saudi Arabia’s housing finance ecosystem, while providing innovative financing solutions for citizens."

Majid Al-Abduljabbar, CEO of SRC, emphasized that the issuance reflects global market confidence in the Saudi economy and strengthens the diversification of funding sources.

“The listing of the sukuk program on the LSE not only strengthens SRC’s global presence and strategy to attract a diverse base of international investors, but also solidifies the company’s position as a key player in the mortgage finance market, paving the way for new strategic partnerships and high-quality international investments," the CEO said.