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Thu 25 Apr 2019 01:57 PM

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Saudi Arabia announces debut 30-year sukuk issuance

Demand for the new issuance, due in 2049, is equivalent to around $2.47bn, according to Saudi Arabia's Debt Management Office

Saudi Arabia announces debut 30-year sukuk issuance
The sukuk will be valuable for long-term financing pricing in the kingdom and that it will support infrastructure projects, as well as public and private sector debt issuances.

The debt management office at the Saudi Ministry of Finance has announced a debut riyal-denominated sukuk issuance with a 30 year maturity.

According to the Saudi Press Agency, the ministry said that the sukuk would be valuable for long-term financing pricing in the kingdom and that it will support infrastructure projects, as well as public and private sector debt issuances.

The issuance is also "expected to be a reference point to price mortgage and savings products by having it as a risk-free point on which price models are based on", the ministry said.

It added that it will also provide new investment products for the local market creating a new investor base such as pension funds, endowments, and insurance companies.

The kingdom began offering local currency bonds in monthly auctions in mid-2015 to help cover a wide budget deficit caused by low oil prices.

It suspended those issues in late 2016 but launched monthly sukuk issues in mid-2017.

Demand for the new issuance, due in 2049, is equivalent to around SR9.25 billion ($2.47 billion), the Debt Management Office added.

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