National Debt Management Center Release the 9th Sukuk Issuance, for the Year 2021

The National Debt Management Center is expected to release the ninth local issuance of Sukuk during the current year of 2021.

This is after local decrees worth SR59.06 billion were issued during the previous 8 months of this year.

According to the Saudi budget, the Kingdom of Saudi Arabia’s public debt increased by SR69.3 billion to 922.85 billion, at the end of the first half of this year, up from SR853.515 billion, at the end of 2020.

The internal debt rose to SR535.273 billion in 2020, compared to SR502.657 billion in 2020, by borrowing SR37.297 billion and paying SR4.7 billion during the first six months of 2021.

On the other hand, the external debt increased by SR36,766 billion to 387.575 billion, up from SR350,859 billion at the end of 2020.

The Saudi budget’s revenues were at SR452.9 billion and expenditures stood at SR464.9 billion, in the first half of this year, with a deficit of SR12.06 billion.

The first issue of the local Sukuk program was on January 18, with a total value of SR2.955 billion. The issues were divided into two tranches, with the first equal to SR2.075 billion, due in 2028 and the second amounting to SR880 million, due in 2033.

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

The third issue was announced on March 15th, with a total issuance volume of SR7.674 billion.

The issues were divided into two tranches, with the first equal to SR2.710 billion for offerings expiring in 2028 and the second amounting to SR4.964 billion for offerings maturing in 2031.

The fourth issuance was held on April 19, with a total issue volume of 11.713 billion. These issues were divided into two tranches, with the first equal to SR3.889 billion, for decrees maturing in 2028 and the second amounting to SR7.824 billion for offerings maturing in 2031.

The fifth issuance, for a total of 3SR.53 billion, was held on May 24. The issues were split into two tranches, with the first equal to SR3.305 billion for offerings expiring in 2028 and the second amounting to SR225 million for decrees maturing in 2033.

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

On July 16, the seventh issue was announced, with a total issuance volume of SR10.412 billion Saudi.

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

The ninth issue took place on August 16, with a total value of SR11.358 billion set as the issue volume. The offerings were divided into three tranches, with the first being SR2.508 billion for offerings due in 2029 and the second worth SR4.485 billion for offerings due in 2033. The third tranche, for offerings due in 2036, was SR4.365 billion.

It is noteworthy that the National Debt Management Center issue debt instruments, with a negative return last February, to be the largest segment issued with a negative return, outside the European Union.

Subscription brought in an estimated €1.5 billion. To conclude subscription window for the Kingdom’s second international issue, this time it was denominated in euros.

It’s separated into two sections: The first section consists of one billion euros in 3-year notes due in 2024, with a negative expected return of -0.06%, and half a billion euros in 9-year bonds, due in 2030 with a return of less than 1%.

This boosts and reflects investors’ faith in the Saudi economy’s robustness.

Since the issue of foreign debt instruments in 2016, international portfolios have become fully aware of the Kingdom’s creditworthiness and credit rating strength.

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