Saudi Real Estate Refinance completes issuance of SAR 4 bln sukuk

Saudi Real Estate Refinance Company (SRC), wholly owned by the Public Investment Fund (PIF), successfully completed its dual tenor SAR 4 billion ($1.067 billion) sukuk issuances, the company said in a statement today, March 9, 2021.

The issuance is part of the newly launched SAR 10 billion Saudi Riyal sukuk program under which SRC will issue sovereign-guaranteed sukuk targeting local investors. Over 30% of the issuance was subscribed by a mix of asset managers, pension fund, government funds and insurance companies.

The SAR-denominated issuance was offered in the 7 and 10 year tenors as private offering to Saudi-based institutional investors attracting an order book in excess of SAR 8 billion, representing an oversubscription of 2.15 times.

This underscores the investor confidence in the Saudi housing market's strength, which witnessed an increase in homeownership from 45% in 2017 to 62% in 2020.

“The favourable cost of funding for SRC ultimately translates to an ecosystem where mortgages are more affordable and accessible to our citizens. The sukuk program brings us one step closer to achieving the strategic objectives of the housing program under Vision 2030," said Majed Al Hogail, Minister of Housing and chairman of SRC.

HSBC Saudi Arabia acted as the sole arranger on establishing the sukuk program and as a sole lead coordinator, sukuk holders' agent and payment administrator on the issuances under the program. Aljazira Capital, HSBC Saudi Arabia, and Saudi Fransi Capital acted as joint lead managers and bookrunners on the issuances under the program.