Saudi Real Estate Refinance Company Launches $2.5 Billion Sukuk Issuance
Saudi Real Estate Refinance Company (SRC), a subsidiary of the Public Investment Fund (PIF), has announced the successful launch and pricing of its latest international sukuk issuance. This issuance, valued at a substantial $2.5 billion and backed by a government guarantee, represents the company's most sizeable offering since its inception.
The offering was divided into two segments: a $1.5 billion tranche with a 3.5-year maturity and a second tranche worth $1 billion with a 10-year maturity, showcasing the SRC's robust presence in the global financial markets.
Strong international interest was evident, with the issuance drawing an order book that was oversubscribed by 5.5 times. This overwhelming demand from global investors underscores the allure of Saudi debt instruments and solidifies SRC's reputation as a consistent and dependable issuer on the international stage.
The SRC's recent sukuk issuance is a key component of its broader $5 billion international sukuk program, which is listed on the International Securities Market (ISM) of the London Stock Exchange. This follows the company's inaugural $2 billion issuance in February, marking another step forward in its commitment to enhancing liquidity in the mortgage market and broadening its investor base.
Majid Al-Hogail, Minister of Municipalities and Housing and Chairman of the SRC's Board, highlighted the significance of this financial move. He remarked, "the success of this second international issuance reflects confidence in the strength of the Saudi economy and confirms the company's role in enhancing liquidity in the mortgage market and expanding the investor base."
Majeed Al-Abduljabbar, CEO of the SRC, also commented, "The completion of the second international sukuk pricing under the program reflects the attractiveness of Saudi debt instruments to global investors, expands the investor base, and supports the development of the secondary mortgage finance market in the Kingdom."
The issuance's success was further bolstered by receiving credit ratings from prestigious international rating agencies, Moody's and Fitch. These ratings reinforce the SRC's significant position as an enabler of the housing sector in the Kingdom, demonstrating financial stability and reliability to investors worldwide.
Since its establishment by the Public Investment Fund in 2017, the SRC has been instrumental in reshaping the Kingdom's mortgage finance market. Licensed by the Saudi Central Bank (SAMA), the company's efforts are aligned with the objectives of the Housing Program under Saudi Vision 2030.
By providing liquidity to lenders, the SRC enables the offering of more affordable housing finance to individuals and collaborates with various partners to support the housing ecosystem in Saudi Arabia.
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