NCDM Set to Offer Last Local Sukuk for Year 2021

The National Center for Debt Management (NCDM) is expected to put forward the 12th and final local issuance of sukuk, during the current Year 2021, December 20, after collecting as much as SR74.8 billion from the previous issues, through 11 months of the year.

The public debt is expected to reach SR938 billion by the end of this year, an increase of about SR85 billion, compared to its levels at the end of 2020, which was SR853.515 billion, while internal and external debt issuances are expected to reach SR125 billion, including about SR75 billion internal debts, SR49 billion external debts, and SR40 billion of debts were paid during the current year, bringing the net internal and external borrowing to about SR85 billion, according to Saudi Arabia’s 2021 budget estimates.

The first issue of the local sukuk program was held on January 18, at a value of SR2.955 billion, and the issues were divided into two tranches, the first amounting to SR2.075 billion, due in 2028, while the second tranche amounted to SR880 million, for sukuk maturing, in the 2033.

The second issue took place on February 15, and the issue volume was determined, at a total amount of SR3.160 billion, and it was divided into two tranches, the first amounting to SR1.930 billion, due in 2028, while the second tranche amounted to SR1.230 billion, for sukuk maturing in 2033.

The third issue was issued on March 15 of the year, the issuance volume was determined at a total amount of SR7.674 billion and the issues were divided into two tranches, the first amounting to SR2.710 billion for sukuk maturing in 2028, while the second tranche amounted to SR4.964 billion for sukuk maturing in 2031.

The fourth issue took place on April 19, and the issue volume was determined at a total amount of SR11.713 billion, and the issues were divided into two tranches, the first amounting to SR3.889 billion, for sukuk maturing in 2028, while the second tranche amounted to SR7.824 billion for sukuk maturing in 2031.

The fifth issue took place on May 24, with a total amount of SR3.53 billion, and the issues were divided into two tranches, the first amounting to SR3.305 billion for sukuk maturing in 2028, while the second tranche amounted to SR225 million for sukuk maturing in the2033.

The sixth issue was issued on June 15, with a total amount of SR8.265 billion, the issues were divided into three tranches, the first amounting to SR2.755 billion for sukuk maturing in 2028, while the second tranche amounted to SR4.650 billion for sukuk maturing in 2031, and the third tranche amounted to SR860 million for sukuk maturing in 2035.

The seventh issue was on July 16, and the issuance volume was determined at a total amount of SR10.412 billion.

The issues were divided into two tranches, the first amounting to SR6.462 billion, for sukuk maturing in 2031, while the second tranche amounted to SR3.950 billion for sukuk maturing in 2035.

The eighth issue took place on August 16, and the volume of the issuance was determined at a total amount of SR11.358 billion.

The issues were divided into three tranches, the first amounting to SR2.508 billion for sukuk maturing in 2029, and the second tranche amounting to SR4.485 billion, for sukuk maturing in 2033, and the third tranche amounted to SR4.365 billion for sukuk maturing in 2036.

And the ninth issue took place on September 13 last, with an issuance volume determined at a total amount of SR6.675 billion.

The issues were divided into three tranches, the first amounting to SR3.170 billion for sukuk maturing, in 2029, and the second tranche amounted to SR2.855 billion for sukuk maturing, in 2033, while the amount of the third tranche was SR650 million for sukuk maturing in 2036.

The tenth issue took place on October 18, 2021, and the issuance volume was determined at a total amount of SR8,500 billion, divided into two tranches, the first amounting to SR3.905 billion for sukuk maturing in 2029, while the second tranche amounted to SR4.595 billion for sukuk maturing in 2033.

The eleventh issue took place on November 15, 2021, with issuance volume at a total amount of SR614.179 million, with a single tranche of SR614.179 million for sukuk maturing in 2033.

The National Center for Debt Management launched 3 international issuances during the Year 2021, where it issued debt instruments with a negative return, during the month of February, to be the largest segment issued with a negative return, outside the European Union.

An estimated SR1.5 billion euros were collected from subscriptions, thus closing the subscription for the second international issuance in the history of the Kingdom, denominated in euros, divided into two tranches, the first tranche of 1 billion euros for 3-year bonds, due in 2024, with a negative return estimated at -0.06% and half a billion euros for 9-year bonds, due in 2030 with, a return of less than 1%, which enhances and reflects investors’ confidence in the strength of the Saudi economy, as international portfolios have become fully aware of the creditworthiness and credit strength of the Kingdom, since the issuance of international debt instruments, in 2016.

It should be noted that one of the advantages of Saudi Arabia entering the euro market, is the expansion of the investor base, in general, and European investors, in particular, in addition to the diversity of investors, in the market, as some investors only invest in the euro currency.

The Kingdom is the first Gulf country to issue euro-denominated bonds in 2019.

The very high demand have proven the strength of the Kingdom of Saudi Arabia, that enables it to enter different markets without affecting debt prices, in the long run, and the possibility of diversifying sources of financing, proving the sovereign power of the Kingdom and the possibility of consolidating and building relationships strategy.

This is the second international issuance for the -Year 2021, following the Kingdom issuance of  $5 billion, in January.

The third international issue took place in November, with a value of $3.25 billion, divided into two tranches, the first with a value of $2 billion (equivalent to SR7.5 billion) for 9.5-Year sukuk maturing, in 2031, while the second tranche amounted to $1.25 billion (equivalent to SR4.69 billion for 30-Year bonds, maturing in 2051.