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Saudi’s latest sukuk issuance gets $17bn worth of orders

By Pramod Kumar
REUTERS
The 14 banks have been banned from undertaking dollar transactions but can continue to use Iraqi dinars and other foreign currencies

Saudi Arabia has launched a dollar-denominated sukuk with tenors of six and 10 years for the second time this year.

The Arab world’s largest economy drew over $17 billion in demand for the issue, Reuters reported, citing a bank document.

The initial guidance for the six and 10-year sukuk was at 110 basis points (bps) and 135 bps over US Treasuries.

Citi, JPMorgan and Standard Chartered are global coordinators, in addition to Aljazira Capital, BNP Paribas and Goldman Sachs.

“Probably taking advantage of the market and front loading in case there is more pressure on the oil price,” Reuters reported, citing Monica Malik, chief economist at Abu Dhabi Commercial Bank.

Saudi Arabia will trim oil production by 500,000 barrels per day (bpd) from this month, as part of a 1.16 million bpd cut previously announced by Opec+.

In January, Riyadh tapped the debt market, raising $10 billion with three-tranche conventional bonds.

In September 2022, Refinitiv’s 2022 sukuk survey said sukuk issuance was still projected to grow at an estimated compound annual growth rate of 6.8 percent over the next five years, reaching $257 billion in 2027.

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