Saudi Real Estate Refinance Company wraps up SAR3.5bn sukuk issuance

Public Investment Fund (PIF)-owned Saudi Real Estate Refinance Company (SRC) has successfully completed its latest Sukuk issuance of SAR3.5bn.

The issuance was offered in five and seven-year dual tenors, marking the final two tranches under its SAR20bn government-guaranteed sukuk programme.

The company was established in 2017 by the PIF after obtaining a license from Saudi Central Bank to operate in the market and as part of the government initiatives to support the Vision 2030 Housing Program.

SRC goals aligned with Vision 2030

Fabrice Susini, CEO of SRC, said: “The issuance witnessed interest from the institutional investor community, reinforcing the confidence in the local market and in our operational framework; it also affirms the company’s pivotal role in contributing to Vision 2030 Housing Program as well as to the Financial Sector Development Program. 

 “SRC’s consistent sukuk issuances reinforce our commitment to taking part in financial sector development in Saudi Arabia. Through these issuances, we are contributing to diversifying funding for the real estate sector and driving growth. By providing banks and real estate finance companies with liquidity, the company enables further development in the home financing sector increasing homeownership rates among Saudi citizens.”

HSBC was the lead coordinator on the latest offering. Joint lead managers included Aljazira Capital, HSBC Saudi Arabia, Alrajhi Capital, and SNB Capital. Earlier this year, the company received high credit ratings and was rated ‘A+’ (stable) by Fitch Ratings, A- (stable) by S&P Global and ‘A2’ (positive) by Moody’s Investors Service, the company shared in a statement.

Key deal signed

In other news, in March, SRC signed a portfolio purchase agreement with Alrajhi Bank, considered the world’s largest Islamic bank by mortgage assets and market cap, to refinance more than SAR5bn real estate financing portfolio.  The deal signed is the largest of its kind signed in the Saudi banking industry. 

Read: Saudi’s SRC, Alrajhi Bank sign landmark refinancing deal

The deal marked the company’s ongoing efforts to support development in the residential real estate finance sector by expanding its refinancing portfolio, and solutions to create a stable secondary real estate market in the kingdom.