Saudi Real Estate Refinance Company announces its largest ever Sukuk, providing liquidity to kingdom’s market

Saudi Real Estate Refinance Company announces its largest ever Sukuk, providing liquidity to kingdom’s market

Saudi Real Estate Refinance Company (SRC) announced on Tuesday the successful completion of its dual tenor SAR 4 billion ($1.067 billion) Sukuk issuances, which will ultimately provide liquidity to Saudi Arabia's housing market.

This issuance is a part of the newly launched SAR 10 billion Saudi-Riyal Sukuk programme under which SRC, which is wholly owned by the Kingdom's Public Investment Fund, will issue sovereign-guaranteed Sukuk targeting local investors. Sukuks are an Islamic financial certificate, commonly referred to as sharia-compliant bonds.

“It was quite significant that we achieved this success although the company is relatively young, set up in 2017, so it is was only the third time we were issuing and the first time we were issuing with the guarantee of the MOF [Ministry of Finance],” said Fabrice Susini, CEO of SRC.

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While typically financial institutions such as banks are almost the sole subscribers in fixed income issuances (which offer fixed dividend payments), over 30 percent of SRC's issuance was subscribed by a mix of asset managers, pension and government funds, and insurance companies, said Susini.

“I find this diversification in investors interesting because it