Saudi Real Estate Refinance sets up SR11B sukuk issue programme

DUBAI — Government-owned Saudi Real Estate Refinance Co (SRC) has established a programme allowing it to issue up to SR11 billion ($2.9 billion) of local currency-denominated Islamic bonds, the company said on Thursday.

The company mandated HSBC Saudi Arabia as sole lead manager and bookrunner to arrange meetings with investors, and an initial, senior sukuk issue under the programme will follow, subject to market conditions, it said.

Founded in 2017 by the Public Investment Fund (PIF), SIC aims to accelerate housing construction — a top objective of economic reforms — by injecting liquidity into the real estate market.

SRC has so far operated with financing from the PIF and shortterm deals with banks, but may now become a major issuer in Saudi Arabia’s domestic bond market. Increasing activity in that market is another goal of economic reforms. The company’s statement on Thursday did not reveal how large the initial sukuk issue would be, merely saying sukuk would be offered from time to time through multiple issuances.

In an interview with Reuters in August, SRC chief executive officer Fabrice Susini said the first public issue would probably be at least SR300 million to SR500 million.

The company has said it aims eventually to refinance 20 per cent of Saudi Arabia’s primary home loans market, which authorities hope to expand to SR500 billion by 2020 and SR800 billion by 2028 from SR290 billion now. —

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First public sukuk eyed by Saudi Real Estate Refinance