Investor demand for Saudi Arabia’s international sukuk issuance for 6 and 10 years has exceeded $17 billion.
The Kingdom entered the international debt markets by selling sukuk in two tranches. A document showed that Saudi offered dollar-denominated sukuk for 6 and 10-year tenors.
The initial price guidance was set at 110 basis points over US Treasuries for the 6-year sukuk and 135 basis points over for the 10-year sukuk.
Read more: Saudi dominates $26.9 bn MENA debt market in Q1
Citigroup, JPMorgan, and Standard Chartered have been appointed as coordinators for the issuance.
Saudi Arabia started off 2023 by securing $10 billion in financing from international markets, taking advantage of the significant improvement in global markets compared to the beginning of 2022.
In January, the Saudi Minister of Finance, Mohammed bin Abdullah Al-Jadaan, approved the annual borrowing plan for 2023 after it was approved by the board of the National Debt Management Center during their recent meeting.
The plan included the most significant developments in public debt and debt market initiatives for 2022, the financing plan for 2023 and its guiding principles, as well as the 2023 calendar for sukuk issuances under the local currency sukuk program of the Kingdom in Saudi riyals.
The plan also included projections that the financing needs for 2023 would be approximately SAR 45 billion, given the reduction of a portion of the financing needs for 2023 through pre-financing operations carried out during 2022, amounting to approximately SAR 48 billion.
Taking the lead
Debt issuances in the Middle East and North Africa (MENA) region have been on the rise in recent years, as governments and companies seek to raise funds for various projects and investments.
According to data from financial market data provider Refinitiv, the value of MENA Q1 debt issuances nearly tripled during Q1 2023 to $26.9 billion.
The country that issued the most bonds during the period was Saudi Arabia, responsible for 67% of the total bond proceeds, followed by the United Arab Emirates (17%), Morocco (9%), and Egypt (6%).
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