NDMC completes $5B trust certificate issuance

Logo of National Debt Management Center (NDMC) 

The National Debt Management Center (NDMC) announced the completion of a $5 billion trust certificate issuance (Sukuk), under the Kingdom's Global Trust Certificate Issuance Program.

The total volume of subscription applications neared $20 billion, with the coverage ratio exceeding four times the $5 billion (SAR 18.75 billion) issuance.

NDMC stated that the issue was divided into three tranches, the first of which is worth $1.25 billion (SAR 4.68 billion) for three-year Sukuk maturing in 2027.

The second tranche is valued at $1.5 billion (SAR 5.63 billion) for six-year Sukuk maturing in 2030, with the third totaling $2.25 billion (SAR 8.44 billion) for 10-year Sukuk to mature in 2034.

The noticeable demand from international investors for government debt instruments reflects their confidence in the Saudi economy and the future of its investment opportunities. This is because the volume of subscription applications from a wide range of global investors, asset managers and financial institutions to the Sukuk exceeded the value of the issuance, NDMC said.

It pointed out that this marked the first issuance of three-tranche international sukuk in Saudi Arabia, falling within NDMC strategy to diversify the Kingdom’s financing sources and expand its investor base in order to meet local financing needs from global debt markets efficiently and effectively.

This is to enhance the Kingdom’s presence among other debt markets and manage principal receivables for the coming years, factoring in market movement and risk management in the government debt portfolio, it further stated.

Several local and international banks and financial institutions participated in the success story of this issuance. The joint international coordinators and active bookrunners for this issuance were Citigroup, Goldman Sachs, and BNP Paribas. Meanwhile, AlJazira Capital, JPMorgan, HSBC, and Standard Chartered Bank acted as passive bookrunners for this issue.