Penultimate Local Sukuk Issuance for the Year 2021, in the Pipeline -NCDM

Following issuing local sukuks worth SR74.2 billion, in the first ten-month of the Year 2021, the National Center for Debt Management (NCDM) is set to issue the 11th and penultimate issue of local sukuks, in the current Year 2021, on Monday, November 15.

The Kingdom of Saudi Arabia’s public debt increased by SR94.8 billion to SR948.3 billion by the end of September 2021, up from SR853.515 billion, at the end of 2020, according to the Saudi budget for the first 9-month of the year

On the other hand, the internal debt increased to SR560.557 billion, up SR57.9 billion from 2020’s level of SR502.657 billion, while the external debt increased to SR387.766 billion, up SR36.9 billion from the previous year’s level of SR350,859 billion.

The first issuance of the local sukuk program was held on January 18th, with a total value of SR2.955 billion.

The issues were split into two tranches, with the first equal to SR2.075 billion, due in 2028 and the second amounting to SR880 million maturing in 2033.

The second offering took place on February 15, with a total issue volume of SR3.160 billion, divided into two tranches, the first of which was worth SR1.930 billion and was due in 2028, and the second of which was worth SR1.230 billion, due in 2033.

This year’s third issue was released on March 15th.

The entire issue volume was set at SR7.674 billion, and the issuance was divided into two tranches, the first of which worth SR2.710 billion for sukuk maturing in 2028, and the second worth SR4.964 billion for sukuk maturing in 2031.

The fourth issuance was held on April 19, with a total issue of SR11.713 billion.

While the issues were divided into two tranches, with the first equal to SR3.889 billion for sukuk maturing in 2028, and the second amounting to SR7.824 billion for sukuk maturing in 2031.

The fifth issuance, for a total of SR3.53 billion, was held on May 24.

It has been split into two tranches, with the first equal to SR3.305 billion for sukuk maturing in 2028 and the second amounting to SR225 billion for sukuk maturing in 2033.

The sixth issue, totaling SR8.265 billion, was divided into three tranches, the first of which was SR2.755 billion for sukuk maturing in 2028, the second of which was SR4.650 billion for sukuk maturing in 2031, and the third of which was SR860 million for sukuk maturing in 2035.

The seventh issue took place on July 16 of last year, with a total issuance of SR10.412 billion Saudi.

Issuance was split into two tranches, the first of which was SR6.462 billion for sukuk maturing in 2031, and the second worth SR3.950 billion and was for sukuk maturing in 2035.

The 9th issue took place on August 16th, and the total amount of the issuance was set at SR11.358 billion.

The offerings were divided into three tranches, with the first being SR2.508 billion for sukuk due in 2029 and the second worth SR4.485 billion for sukuk due in 2033.

Third tranche, for sukuk due in 2036, was SR4.365 billion riyals.

9th offering was held on September 13, with a total issuance of SR6.675 billion. The offerings were divided into three tranches, with the first worth SR3.170 billion for sukuk maturing in 2029, the second worth SR2.855 billion for sukuk maturing in 2033, and the third being SR2.855 billion for sukuk maturing in 2034. The third tranche consists of SR650 million in sukuk that will mature in 2036.

The ninth issue took place on October 18, 2021, with a total issue of SR8,500 billion, divided into two tranches, the first of which was SR3.905 billion for sukuk maturing in 2029, and the second was SR4.595 billion for sukuk maturing in 2033.

During the year 2021, the National Center for Debt Management released three international issuances, the largest section was with a negative return debt instrument, issued outside the European Union, during the month of February.

Subscriptions raised an estimated SR1.5 billion euros, putting an end to the second overseas issue, in the Kingdom’s history, to be denominated in euros, which was divided into two tranches: The first tranche of 1 billion euros will be used to purchase 3-year bonds due in 2024, with a negative return of -0.06% expected.

And half a billion euros for 9-year bonds with a return of less than 1% due in 2030, enhancing and reflecting investors’ confidence in the Saudi economy’s strength, as international portfolios have become fully aware of the Kingdom’s creditworthiness and credit strength since the issuance of international debt instruments in 2016.

One of the benefits of Saudi Arabia’s joining the euro market is the expansion of the investor base, in general, and European investors, in particular, as well as the market’s diversity of investors, as some investors solely invest in the euro currency.

In 2019, the Kingdom of Saudi Arabia was the first Gulf government to issue euro-denominated bonds.

The extremely high demand have demonstrated that the Kingdom of Saudi Arabia’s strength allows it to enter different markets without affecting debt prices in the long run, the ability to diversify financing sources, demonstrating the Kingdom’s sovereign power, and the ability to consolidate and build relationships strategy.

This is the Kingdom’s second international offering in 2021, following a $5 billion issuance in January.

The third foreign offering, worth $3.25 billion, was split into two tranches, the first of which was worth $2 billion (equivalent to SR7.5 billion) for 9.5-year sukuk maturing in 2031, and the second of which was worth $1.25 billion (equivalent to SR4.69 billion) for bonds with a 30-year maturity date of 2051.