Saudi Arabia raises $704m through sukuk issuances in March

19/03/2025 12:21 AST

Saudi Arabia has raised SR2.64 billion ($704 million) through sukuk issuances in March as the Kingdom continues to explore opportunities in debt markets to accelerate economic diversification efforts.

The latest riyal-denominated offering follows an SR3.07 billion issuance in February and SR3.72 billion in January.

Saudi Arabia also raised SR11.59 billion in December and SR3.41 billion in November.

The Kingdom has been playing a pivotal role in the global sukuk market, leveraging debt sales to finance projects under its Vision 2030 economic transformation plan.

According to a statement by Saudi Arabia's National Debt Management Center, the issuance for March was divided into four tranches, with the first one valued at SR364 million and set to mature in 2027.

The second tranche has a value of SR316 million, due in 2029, while the third, at SR1.46 billion, is set to mature in 2032.

The fourth tranche worth SR500 million will expire in 2039.

Sukuk, a Shariah-compliant financing instrument, allows investors to hold partial ownership of an issuer's assets while adhering to Islamic finance principles.

Saudi Arabia's debt market has seen significant growth in recent years, attracting investors' interest in debt instruments amid rising interest rates.

In March, a report released by Kuwait Financial Center, also known as Markaz, said that Saudi-based primary issuances of bonds and sukuk led the Gulf Cooperation Council region in 2024, raising $79.5 billion through 79 issuances.

Markaz added that the Kingdom contributed to 53.7 percent of the overall primary debt issuances in the GCC region in 2024.

In February, Saudi Arabia also raised ?2.25 billion ($2.36 billion) through a euro-denominated bond sale, including its first green tranche, as part of its Global Medium-Term Note Issuance Program.

Affirming the growth of the market of such Islamic bonds, S&P Global, in January, said that global sukuk issuance is projected to hit between $190 billion and $200 billion in 2025, driven by increased activity in key markets, including Saudi Arabia and Indonesia.

In December, another report released by Kamco Invest projected that the Kingdom is expected to witness the greatest share of bond and sukuk maturities in the GCC, reaching $168 billion from 2025 to 2029.

According to Kamco Invest, Saudi Arabia's maturities will be led by government issuances that are projected to hit $110.2 billion during the period.