Saudi Arabia closes September sukuk issuance

14 September 2022
Riyadh has issued $453m of bonds in three tranches as the outlook for the Saudi economy improves

Saudi Arabia’s National Debt Management Centre has closed SR1.701bn ($453m) of Islamic bonds.

The bonds are for the September 2022 issuance of the government’s Saudi riyal-denominated sukuk programme.

The issuance was divided into three tranches: the first tranche is SR201m and matures in 2027, the second tranche is SR700m and matures in 2032, while the third tranche is SR800m and matures in 2037.

The Saudi economy is likely to be one of the world’s fastest-growing economies this year, according to the IMF’s latest report on the country in August. GDP is expected to expand by 7.6 per cent in 2022, the fastest growth in almost a decade.

Economic growth in the second quarter of this year was even faster. “Saudi Arabia’s economy enjoyed a strong second quarter, growing by a rapid 12.2 per cent year-on-year, and timely data point to a robust third quarter as well," said London-based Capital Economics in a report on 13 September.

"However, the recent cautious approach taken by Opec+ towards oil production does pose a small downside risk to our GDP growth forecasts for this year and next.”

An increase in construction activity has supported economic growth in the kingdom. By the end of August this year, there had been $14bn of construction and transport awards in Saudi Arabia, according to regional projects tracker MEED Projects. The year-end total is likely to exceed the $18.5bn of contracts awarded in 2021.

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