PIF’s Saudi Real Estate Refinance Company completes latest sukuk issuance of SAR3.5bn

Image credit: PIF/ SRC

Public Investment Fund-owned Saudi Real Estate Refinance Company (SRC) successfully completed its latest sukuk issuance of SAR3.5bn.

This is the sixth tranche under its upsized SAR20bn sukuk programme, guaranteed by Saudi Arabia through the Ministry of Finance.

The latest tranche issued demonstrates strong investor confidence in SRC and the kingdom’s economy, the issuance will enable SRC to keep mortgage rates at low levels.

The company was established in 2017 with the aim of helping transform the local housing market.

Saudi Real Estate Refinance Company obtained a license from the Saudi Central Bank to operate in real estate refinancing through the secondary market.

 SRC outlook upgraded

Saudi Real Estate Refinance Company recently obtained an A- (stable) credit rating from S&P Global and was upgraded by Fitch earlier this year to A+ (stable), while Moody’s Ratings upgraded its outlook on SRC to “Positive”.

Fabrice Susini, CEO of the company said: “The positive response from investors to SRC’s latest sukuk issuance is a clear testament to the strength of the kingdom’s housing market and economy. As SRC continues to refinance existing financings for financiers, we are proud to contribute to the development of a robust secondary home financing market that supports the efficiency and stability of the primary housing market.

“This funding will enable us to continue increasing market liquidity and supporting originators and financiers, ultimately promoting stability in the Saudi mortgage market and accelerating homeownership growth in the kingdom.

Alrajhi Capital and HSBC Saudi Arabia acted as joint lead coordinators on the latest offering, while the joint lead managers are Aljazira Capital, Al Rajhi Capital, HSBC Saudi Arabia, Riyad Capital and Alinma Investment Company.

The company‘s Saudi-Riyal-denominated sukuk programme supports the strategic objectives of Vision 2030’s Financial Sector Development Program and Housing Program.

In March, SRC said it will lower the mortgage benchmark curve (Long-Term Financing Rate or LTFR) by 26 basis points for mortgage tenors from 20 to 30 years.