Saudi Arabia, through its Ministry of Finance, executed a landmark liability management transaction by completing an early repurchase of outstanding bonds and sukuk maturing in 2024, 2025 and 2026, while simultaneously issuing SR64.123 billion ($17.1 billion) in new sukuk across multiple tranches.
This exercise was part of the National Debt Management Center’s ongoing strategy to consolidate the ministry’s local debt offerings under a unified sukuk programme framework and proactively manage debt maturities. It is the fifth such transaction, following similar exercises carried out since July 2020.
The deal encompassed a total of 26 securities with a combined targeted value of SR115 billion and saw an investor participation rate of approximately 55%, notably higher than that of the previous two liability management exercises. Final pricing for the new sukuk was determined on May 15, 2024, following an extensive period of investor engagement and market observation that began on May 6.
The deal marks several milestones for Saudi Arabia: it is the largest sovereign-linked liability management transaction globally since 2021, and the biggest ever executed under the Kingdom’s local sukuk programme. The issuance also featured the ministry’s first floating rate security under the programme and introduced the practice of tapping existing securities as part of the exchange.
HSBC and SNB Capital acted as placement agents and deal managers on this transaction.
