Saudi Real Estate Refinance Co aims to raise around $800mln via domestic sukuk – CEO

Saudi Real Estate Refinance Co aims to raise around $800mln via domestic sukuk – CEO

DUBAI - Saudi Real Estate Refinance Co (SRC), the Saudi equivalent of U.S. mortgage finance business Fannie Mae, will soon issue around 3 billion riyals ($798.34 million) in local currency sukuk, or Islamic bonds, its chief executive said on Tuesday.

HSBC, Bank AlJazira, Al Rajhi, Riyad Capital and SNB Capital are running the debt sale, which is expected as soon as next week, CEO Fabrice Susini told Reuters in an interview.

The company is in discussions with local banks to refinance real estate financing portfolios and the sukuk sale is in anticipation of closing those deals, Susini said.

"We have a couple of transactions coming in the pipeline in the coming weeks, so we anticipate the purchase and want to have the liquidity ready to be deployed," he said.

The issuance will be the first since SRC received regulatory approval to double its domestic issuance programme to 20 billion riyals from 10 billion riyals.

SRC's balance sheet doubled between 2020 and 2021 and is expected to roughly double again this year from last year, Susini said.

Rising interest rates slowed mortgage lending in Saudi Arabia in April and May, though the rate of growth picked up again in June and July. Research showed banks' mortgage exposure