Saudi’s SRC to issue domestic sukuks with $1.3bn funding target

Saudi Arabia

The Saudi Real Estate Refinancing Company (SRC) is looking to issue local sukuks in the coming months, hoping to raise up to 5 billion Saudi riyals ($ 1.3 billion).

The company, which is equivalent to Fannie Mae and Freddie Mac in the United Kingdom in the United States, has plans to tap into international markets in exchange for what he described as a “large sum”.

They are currently working full speed ahead on the update of our program because they are targeting domestic issuances somewhere by fall in possibly more than one tapping of the market.

They have launched an RFP and collected the answers because they will set up an international program as well and they expect to have an inaugural issuance before the year-end.

SRC previously issued domestic sukuks in 2018 and 2019, raising around SAR750m ($200m).

Also, there are a couple of very significant digital transactions coming in the pipeline. That’s only the beginning of the programs that they intend to maintain on the domestic and international markets.

Earlier this week SRC announced the purchase of a portfolio of home loans worth more than SAR3bn ($800m) from the Public Pension Agency.

SRC, which was set up by the kingdom’s sovereign wealth fund in late 2017, aims to employ around 20 billion Saudi riyals ($ 5.3 billion) before the end of the year, mostly by purchasing mortgage portfolios from other lenders, it said previously in a statement.

The latest deal is the largest so far for the company and the country, which had deployed about SAR2.25bn ($600m) at the end of 2019.