Saudi Arabia restructures $32bn sukuk to strengthen debt strategy, local market
JEDDAH: Saudi Arabia has completed a sukuk restructuring and new issuance of over SR120 billion ($32 billion), advancing its strategy to enhance fiscal sustainability, optimize debt management, and deepen the local debt market.
According to the National Debt Management Center, the Kingdom finalized its sixth early repurchase transaction in the domestic market, involving the early redemption of government sukuk maturing between 2025 and 2029 valued at approximately SR60.4 billion.
To refinance these obligations, the NDMC issued new sukuk amounting to SR60.3 billion across five tranches with maturities stretching from 2032 to 2040.
The move supports Saudi Arabia's broader efforts under Vision 2030 to diversify the economy, strengthen fiscal buffers, and develop domestic capital markets amid regional and global uncertainties.
In a release, the NDMC stated: 'This initiative is a continuation of NDMC's efforts to strengthen the domestic market and enables NDMC to exercise its role in managing the government debt obligations and future maturities.'
It added: 'This will also align NDMC's effort with other initiatives to enhance/optimize the public fiscal in the medium & long term.'
The new sukuk issuance was structured across five tranches with staggered maturity dates. The first tranche amounts to approximately SR21.5 billion and matures in 2032. The second tranche is around SR1.8 billion and matures in 2035, while the third tranche totals SR14.2 billion and matures in 2036. The fourth tranche is valued at SR5.9 billion and matures in 2039, while the fifth and final tranche is around SR16.9 billion, maturing in 2040.
To facilitate the transaction, the Ministry of Finance — as the issuer — and the NDMC appointed HSBC Saudi Arabia, SNB Capital, and Al Rajhi Capital, as well as AlJazira Capital and Alinma Investment, as joint lead managers.
The Kingdom's current cost of debt stands at 3.6 percent per annum — among the lowest in emerging markets — and benefits from a low-risk profile, supported by a diversified financing strategy, the ongoing development of the domestic market, and conservative, transparent risk thresholds for managing the debt portfolio.
The move aligns with the country's Vision 2030 and its Financial Sector Development Program, which targets expanding the banking sector's assets from SR2.63 trillion in 2019 to SR3.515 trillion by 2025, increasing the stock market's capitalization to 80.8 percent of gross domestic product, and growing the volume of debt instruments to 24.1 percent of gross domestic product.
The program also aims to promote digital financial innovation, boost SME financing from 5.7 to 11 percent of bank lending, expand the insurance sector's role in the non-oil economy, and raise the share of non-cash transactions to 70 percent, while maintaining adherence to international financial stability standards.
It also ensures adherence to international standards on financial stability to safeguard the sector's robustness.
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