Saudi Arabia has mobilized a total of $13 billion in a seven-year syndicated loan as the Kingdom intensifies efforts to fund infrastructural projects in the areas of power, water, and civil utilities.
The agency said in a statement that the National Debt Management Center had facilitated the financing as part of the government’s medium-term borrowing approach, which seeks to diversify the source of funds and carry out financing at competitive rates.
The deal will help Saudi Arabia in its wider efforts to modernize infrastructure, as part of its economic transformation program under Vision 2030, as the government hastens the effort to invest in utilities and other development projects, along with the involvement of the private sector.
NDMC said, “This transaction aims to leverage market opportunities to execute alternative government financing activities that contribute to economic growth, including the financing of development and infrastructure projects aligned with Saudi Vision 2030.”
The NDMC was established in 2015 as the Debt Management Office in the Ministry of Finance and subsequently restructured to be as it is today, charged with the responsibility to control the public debt and meet the financing requirements of the government on a short, medium, and long-term basis.
The syndicated loan comes after several recent debt market transactions. The center issued sukuks in December of SR7.01 billion ($1.87 billion) in domestic sukuks, divided into five tranches, the first being priced at SR1.23 billion and maturing in 2027.
Therefore, the second tranche was SR335 million, which would be matured in 2029. The third tranche was estimated at SR1.180 billion, which will mature in 2032, and the fourth tranche was estimated at SR1.692 billion, which will mature in 2036.
The fifth tranche had the value of SR2.573 billion and maturing in 2039. NDMC ended the issuance of a $5.5 billion (SR20.63 billion) international sukuk under the Kingdom’s Global Trust Certificate Issuance Program in September.
The offering, the first international sukuk to be issued based on an Ijarah structure, was issued in two tranches. NDMC reported that the five-year sukuk maturing in 2030 raised $2.25 billion (SR8.44 billion), and on a 10-year tranche maturing in 2035 raised $3.25 billion (SR12.19 billion).
The center noted that the issuance is in line with its diversification of the investor base and its commitment to finance the needs of Saudi Arabia, utilizing the international debt capital markets efficiently and effectively.
