Saudi Real Estate Refinance Company Raises SAR3.5 Billion in Sukuk Issuance

The Saudi Real Estate Refinance Company (SRC), a subsidiary of the Public Investment Fund (PIF), has successfully finalized its latest Sukuk issuance of SAR 3.5 billion. This achievement marks the sixth tranche of the expanded 20 billion Saudi-Riyal Sukuk program, backed by the Kingdom of Saudi Arabia via the Ministry of Finance.

The recent tranche reflects solid investor faith in SRC and Saudi Arabia’s economic stability. The funds raised will allow SRC to maintain low mortgage rates. SRC’s creditworthiness has been recognized by reputable rating agencies; it has recently received an A- (stable) rating from S&P Global, an upgrade to A+ (stable) from Fitch, and a “Positive” outlook upgrade from Moody’s Ratings.

SRC’s CEO, Fabrice Susini, said, “The enthusiastic response from investors to our latest Sukuk issuance demonstrates confidence in the Kingdom’s housing market and economy. As we continue to refinance existing loans, we are proud to contribute to the growth of a robust secondary home financing market, enhancing the primary housing market’s efficiency and stability. This funding will bolster market liquidity and support originators and financiers, fostering stability in the Saudi mortgage market and accelerating homeownership growth in the Kingdom.”

The recent offering was jointly coordinated by Alrajhi Capital and HSBC Saudi Arabia, with joint lead managers including Aljazira Capital, Al Rajhi Capital, HSBC Saudi Arabia, Riyad Capital, and Alinma Investment Company.

SRC’s Saudi-Riyal Sukuk program aligns with the strategic goals of the Vision 2030 Financial Sector Development Program and Housing Program.

Established in 2017, the Saudi Real Estate Refinance Company (SRC) aims to revitalize the local housing market. The company is licensed by the Saudi Central Bank to operate in real estate refinancing via the secondary market.

Key Takeaways

• The Saudi Real Estate Refinance Company (SRC) has successfully raised SAR3.5 billion in a Sukuk issuance.
• This is the sixth tranche of the company’s expanded 20 billion Saudi-Riyal Sukuk program.
• The funds raised will allow SRC to maintain low mortgage rates and support the growth of the secondary home financing market.
• SRC’s creditworthiness has been recognized by reputable rating agencies.
• The company’s Sukuk issuance is a sign of investor confidence in the Kingdom’s housing market and economy.
• SRC’s Saudi-Riyal Sukuk program aligns with the strategic goals of Vision 2030.