Saudi Arabia raised $ 2 billion for the sale of new sukuk in the second-largest sukuk sales of the kingdom, after having sold 9 billion dollars last year to be eligible for the external financing needs of 2018.
The Sukuk sale was part of the Ministry of Finance's commitment to develop Sharia-compliant debt markets, the Saudi Public Debt Management Office said in a statement on Thursday.
The Saudi Ministry of Finance began to sell Islamic bonds at an initial indicative price of around 145 basis points above the average fixed and variable interest rate swaps.
The benchmark price was reduced to a final price of 127 basis points above the average fixed and floating rate, which corresponds to a return of 4.3%.
The numbers indicate that investors are enthusiastic about the deal, while the Public Debt Management Office announced that subscription requests amounted to more than $ 10 billion.
According to informed sources, Saudi Arabia is planning to issue new dollar instruments. The Sukhuk must be paid on September 19th and no later than January 2029.
The government has raised $ 52 billion through Islamic and conventional international bonds since it began to enter global debt markets in 2016 as part of its efforts to diversify its oil-based economy.
After the government had sold conventional bonds worth $ 11 billion, the head of Saudi Arabia's debt management office confirmed that the amount covered the Kingdom's needs for foreign currency financing for 2018.
Citi, HSBC and JPMorgan coordinated the problem by working together with BNP Paribas, Mizuho and Samba Capital.