Saudi Arabia extends debt curve with new 30-year sukuk

The Debt Management Office (DMO) at Saudi Arabia’s Ministry of Finance has successfully launched sukuk issuance in the local market for 30 years, maturity 2049, as it extended the local currency yield curve of the Kingdom, state news agency SPA reported.

The demand for the new issuance, due in 2049, is equivalent to around SAR 9.25 billion ($2.47 billion), which is close to 80 percent of Saudi Arabia’s total debt issuance in April.

The issuance is expected to be a reference point to price mortgage and savings products by having it as a risk-free point on which price models are based on.

“This issuance would also provide a new investment product in the local market for a new investor base such as pension funds, endowments and insurance companies in line with what is being applied in the developed markets,” the statement noted.
 

The DMO has succeeded in extending the local yield curve over the last three months, which was initially capped at a maximum of 10 years only, through issuing 12 year tranche in the February, the statement said.