Top 6 sukuk, bond deals in Saudi Arabia so far in 2019

Saudi Arabia is expected to be the largest issuer of bonds and sukuks in the Middle East and North Africa (MENA) region this year, according to consultancies.

The Kingdom raised $28.51 billion through 22 issuances last year, Kuwait Financial Centre (Markaz) said in a recent report.

Faisal Hasan, chief business development officer and head of investment research, KAMCO, told Argaam this month that Saudi Arabia's latest budget shows an expected fiscal deficit of around $35 billion this year and a majority of this is expected to be financed through bonds and sukuk issuances.

Meanwhile, Trevor Cullinan, director - sovereign ratings, S&P Global told Argaam that the Kingdom is expected to lead the MENA region with $29 billion worth of long-term commercial borrowing this year.

Argaam has compiled a list of bonds and sukuk issuances closed and proposed in the first two months of 2019.

1) Saudi Arabia’s Ministry of Finance closed sukuks worth SAR 7.095 billion, which included sukuk program issuance (01-2019) at SAR 5.37 billion and re-opening issuance (09-2017) at SAR 1.725 billion.

2) The Ministry of Finance sold SAR 9.38 billion worth of domestic sukuk in February under the government’s riyal-denominated sukuk program.

3) Almarai Co. completed the issuance of a $500 million worth of fixed-rate "RegS Senior" unsecured sukuk at a par value of $200,000, with the sukuks bearing a return of 4.311 percent.

The five-year sukuk will be fully redeemed upon maturity date.

4) Saudi Aramco is planning to tap the international bond market in Q2 2019, Energy Minister Khalid Al-Falih told Argaam.

“Saudi Aramco is planning to tap the international bond market in Q2 2019. These bonds require a prospectus, to be issued by Aramco upon the sale including financial statements and information for shareholders about the IPO,” he added.

5) Saudi Arabia is studying the possibility of issuing euro-denominated bonds, the former Finance Minister (who is now the Minister of State for Foreign Affairs) Mohammed Al-Jadaan told CNBC.

6) Jabal Omar Development Co. is expected to issue new riyal-denominated sukuk in Q1 2019, CEO Yasser Al-Sharif told CNBC Arabia.

The sukuk issue will likely reflect investors’ turnout as well as their confidence in the market, he stated.

Write to Parag Deulgaonkar at parag.d@argaamplus.com