Saudi Arabia: Saudi Arabia’s National Debt Management Center has closed the issuance of SR3.65 billion ($980 million) riyal-denominated sukuk for February 2023, according to an official statement.  

The statement released by NDMC noted that the sukuk was divided into two tranches, with the first at SR3.22 billion, set to mature in 2031. 

The second tranche for February was SR433 million, which will mature in 2037.  

Also called an Islamic bond, sukuk is a debt product issued according to Shariah or Islamic laws. 

The Saudi Riyal Local Sukuk Program is one of the Kingdom’s financing tools where the Ministry of Finance issues local instruments that are then organized by the NDMC and later divided into monthly tranches for investors. 

NDMC, in its statement, noted that the total value of all bids received for February stood at SR3.71 billion.  

In February, NDMC’s riyal-denominated sukuk program showed a closing of SR180 million more than in January.  

In January 2023, NDMC closed the issuance of SR3.47 billion, which also came in two tranches. 

According to an S&P Global report released in January, global sukuk issuances are expected to continue declining in 2023 to about $150 billion compared to $155.8 billion in 2022 and $170.4 billion in 2021.  

The report found that a decline in total sukuk issuances happened in most core Islamic finance countries, with only a few exceptions such as Malaysia and Turkiye which saw marginally higher numbers.  

S&P Global Ratings credit analyst Mohamed Damak noted that factors like lower and more expensive global liquidity, increased complexity, and reduced financing needs for issuers are expected to deter the market in some core Islamic finance countries.  

He added: “However, we see some supportive factors in other areas.”  

The S&P Global report further pointed out that corporate firms are expected to contribute to issuance volumes, particularly in countries like Saudi Arabia where economic transformation programs are progressing steadily. 

“The sukuk market seems to be lagging the conventional one when it comes to automation and issuance of digital instruments, which could accelerate growth and make the process more appealing,” said Damak.