Saudi Arabia completes first 15-year public sukuk issuance

Saudi Arabia’s Debt Management Office (DMO) has completed the Kingdom’s first 15-year public sukuk issuance, adding a three-year maturity compared to February’s issuance, and a five-year maturity compared to 2018 previous issuances.

“The issuance, which was divided into two tranches of 10 and 15 years, was skewed towards the 15-year maturity, which accounted for 61 percent of the total issue,” the Ministry of Finance said in a statement on Tuesday.

The issuance has also included the first ever international investor to invest in the Kingdom's Saudi riyal sukuk.

“The 15-year issuance represents a new benchmark for potential government and private sector issuers to enable them to price off the government’s extended yield curve,” the ministry added.

It also caters market demand - alongside conventional bank lending - for these tenors, which will translate into a new financing source, especially amidst the Kingdom’s economic transformation.

The new financing channel could be used to support financing long-term projects such as infrastructure projects, mortgage market, and other types of long term projects, the statement added.

Saudi Arabia closed March 2019 sukuk issuance under the government’s riyal-denominated sukuk program, with the issuance size set at SAR 6.075 billion, Argaam reported.