RC issues SAR 4 billion sovereign guaranteed Sukuk


Saudi Real Estate Refinance Company (SRC), owned by the Public Investment Fund, has announced the successful completion of the dual tenor SAR 4 billion (approx. USD 1.067 billion) Sukuk issuances.

The issuance is part of the newly launched SAR 10 billion Saudi-Riyal Sukuk program under which SRC will issue sovereign-guaranteed Sukuk targeting local investors.

Over 30% of the issuance was subscribed by a mix of asset managers, pension fund, government funds, and insurance companies.

The SAR denominated issuance by SRC was offered in the seven and 10 year tenors.

The issuances were a private offering to Saudi-based institutional investors attracting an orderbook in excess of SAR 8 billion which represents an oversubscription of 2.15 times.

This underscores the investor confidence in the strength of the Saudi housing market which witnessed an increase in homeownership from 45% in 2017 to 62% in 2020.

Majed Al-Hogail, the Minister of Municipal, Rural Affairs and Housing and Chairman of SRC, said, “The successful Sukuk issuance demonstrates confidence among the investor community and trust in a robust housing market in the Kingdom and more broadly a resilient Saudi economy.

The favorable cost of funding for SRC ultimately translates to an ecosystem where mortgages are more affordable and accessible to Saudi families.

The Sukuk program brings us one step closer to achieving the strategic objectives of the housing program under Vision 2030.”

“The completion of issuances by SRC under the new Sukuk program marks an important step towards the development of a robust secondary mortgage market and the wider housing sector in the Kingdom,” Fabrice Susini, CEO of SRC.

“Our role in sustaining a healthy housing market is further validated by the strong investor interest in our issuance which helps achieve our funding objectives.

The latest sovereign-guaranteed offering, underpinned by favorable cost of funding and terms, will further provide liquidity to the Saudi housing market that helps our citizens climb the housing ladder.

This issuance will also contribute to the realization of the Public Investment Fund’s strategy, a key driver in promoting the growth of the Saudi economy and diversifying sources of income by launching new sectors, including a secondary market for real estate financing.”—SPA