Arab News, Wednesday, May 10, 2023 | Shawwal 20, 1444
PIF-owned Saudi Real Estate Refinance Co. receives ‘A-’ classification with stable outlook
Saudi Arabia: The Saudi Real Estate
Refinance Co. has received an “A-” classification at the level of global credit
and “KsaAAA” at the level of local credit with a stable outlook from the credit
rating agency S&P Global.
According to the rating company, an obligatory
rated “A-” falls under an upper-medium category, which indicates strong
creditworthiness and has good capacity to meet its financial commitments.
On the other hand, a rating of “AAA” on the
national scale means the debtor’s capacity to meet its financial commitments on
the obligation relative to other national debtors is extremely strong.
According to the SRC website, the real estate
financing company is rated “A-” stable by Fitch Ratings and “A2-” stable by
Moody’s Investors Service.
In March, SRC signed an agreement with Al Rajhi
Bank to refinance more than SR5 billion ($1.33 billion) worth of real estate
financing portfolio.
“The deal is the largest of its kind in the Saudi
banking industry,” said SRC in a statement.
SRC CEO Fabrice Susini described the deal as a
milestone in the company’s “strategic approach to support the housing market in
the Kingdom by providing flexible mortgage solutions to citizens.”
In the same month, SRC announced that it will be
lowering the mortgage benchmark curve by 26 basis points for mortgage tenors
from 20 to 30 years.
By reducing the long end of the mortgage rates in
a rising global interest rate environment, SRC said it continues to “support the
development of a robust mortgage market and its liquidity, continuously
providing affordable and accessible financing options to Saudi citizens.”
Founded in 2017 by the Kingdom’s Public Investment
Fund, SRC’s primary role is to provide banks and real estate finance companies
with liquidity, enabling growth in the home financing sector to increase home
ownership rates among Saudi citizens.
The company issued two sukuks in 2022, the first
tranche totaling SR4 billion in April and the other tranche SR3 billion in
September.
According to its annual report for 2022, SRC had
access to eight short-term credit facilities worth SR7.65 billion as of Dec. 31,
of which its total utilized limits was SR1.18 billion.