Saudi Arabia has set the size of its debut sharia-compliant dual-trance dollar bond issuance size at $9 billion, the largest ever Islamic notes to be issued globally.

The kingdom has split the deal between a five-year and a 10-year tranche of $4.5bn each, according to a Ministry of Finance statement carried by the kingdom’s official news agency SPA. Fixed income investors and analysts were expecting Riyadh to tap the market for $10bn.

Saudi Arabia received “significant interest” from investors with order book reaching in excess of $33bn, according to the statement.

“This reflects the strong fundamentals of the Saudi economy,” according to the ministry, which added that the deal illustrates the role of the kingdom’s Debt Management Office (DMO) established as part of Riyadh’s Vision 2030.

Saudi Arabia’s move to raise funds with large sukuk issuances follows Riyadh’s 2016 $17.5bn bond deal, the largest emerging market debt sale ever, in its first foray into the international bond market as the kingdom sought to plug the budget deficit and fund its economic transformation plan.

Riyadh has announced a 2017 budget with target of about deficit of 8 per cent of GDP, and it intends to achieve a balanced budget by the end of the decade under its Fiscal Balance Programme 2020. However, US’ rating agency S&P expects the central government deficit of about 9 per cent of GDP in 2017, narrowing to 4 per cent by 2020. S&P forecast the annual average increase in net general government debt of about 2 per cent of GDP.

So far, Saudi Arabia has financed its deficit by drawing down on foreign reserves, and issuing billions of riyal worth of domestic debt. It tapped the international loan market in 2016 as well with a $10bn syndicated facility.

In addition to its borrowing programme, the kingdom is looking to privatise some of its assets to stimulate economic growth, improve the fiscal position, and contain the cost of public-sector salaries. It plans to float less than 5 per cent of oil and gas giant Saudi Aramco on the country’s bourse and another yet undecided international stock market. Aramco’s initial public offering, slated to be the biggest ever global share sale, is the centre piece of the Riyadh’s efforts to diversify its hydrocarbons-dependent economy and generate alternative revenue sources.