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HOME LOAN PORTFOLIO BOOST

Saudi group eyes Fannie Mae-style $1.1bn sukuk sale

RIYADH, April 25, 2019

Saudi Real Estate Refinance Company (SRC) is planning to issue up to SR4 billion ($1.1 billion) of long-term sukuk which is being modelled on the lines of US mortgage finance firm Fannie Mae, reported Reuters citing its top official.
 
The plan by SRC, a subsidiary of Saudi Arabia's sovereign Public Investment Fund, comes as it prepares to purchase more home loan portfolios from mortgage financing companies and banks to boost the kingdom's secondary mortgage market.
 
SRC, formed in 2017, is also keen to tap foreign institutional investors for its debt sale this year, stated CEO Fabrice Susini in an interview.
 
"Our strategy is clearly to tap the market twice this year," he said. "We are really looking at probably issuing something between ... SR2 and SR4 billion that we may be issuing in two tranches," revealed Susini.
 
He said SRC was looking at sukuk in the 10 to 15-year range, to help minimise refinancing risks. "Generally speaking we are trying to issue as long as possible," he added.
 
Saudi Real Estate Refinance Company, said Susini, was assessing whether it could also issue bonds in currencies other than the local riyal.
 
In March, SRC completed a SR750 million sukuk issue with multiple tenors, under a programme that allows it to issue up to SR11 billion of local currency denominated Islamic bonds, he added.



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