In March, Saudi Arabia successfully completed its riyal-denominated sukuk issuance, surpassing the $1 billion mark for the fourth consecutive month, according to government data.
The National Debt Management Center of the Kingdom disclosed that three tranches of the Shariah-compliant debt instrument were closed, totaling SR4.44 billion ($1.18 billion). Notably, in November, Saudi Arabia's sukuk issuance had dipped below $1 billion to SR2.66 billion but rebounded in subsequent months, reaching SR10.53 billion in December, SR8.82 billion in January, and SR7.87 billion in February.
The March issuance comprised three tranches: the first tranche, valued at SR203 million, will mature in 2029; the second tranche, worth SR3.69 billion, is due in 2034; and the third tranche, valued at SR540 million, will mature in 2039.
The NDMC recently concluded its second government sukuk savings round for March, receiving requests totaling SR959 million from 37,000 applicants. The financial product, known as Sah, offers a return of 5.64 percent with a maturity date set for March 2025. Sah, introduced by the Ministry of Finance and NDMC, aims to boost fund ratios among individuals by encouraging regular savings allocation.
In a broader context, a report by credit rating agency S&P Global forecasts global sukuk issuance to range between $160 billion and $170 billion in 2024, driven by increased financing needs in Islamic nations. The report also mentions a decline in global Islamic bond issuance by 6.1 percent to $168.4 billion in 2023, attributed to tighter conditions in Saudi Arabia's banking system and Indonesia's reduced fiscal deficit.
Additionally, the report anticipates a rise in sustainable sukuk issuance in 2024 following the successful UN Climate Change Conference (COP28) held in the UAE in 2023. Another report by Fitch Ratings predicts that the environmental, social, and governance (ESG) market for Shariah-compliant debt products will exceed 7.5 percent of global outstanding Islamic bonds in the coming years, fueled by issuers' diversification plans and governments' sustainable initiatives.