Saudi Sovereign Fund Raises Two Billion Dollars from International Sukuk Offering Amid Strong Demand

SadaNews - The Saudi Public Investment Fund has completed the issuance of international sukuk worth two billion dollars for a term of ten years, as part of its ongoing efforts to diversify funding sources in global markets.

The sukuk were priced with a fixed annual yield of 5.133%, at 85 basis points above U.S. Treasury yields, compared to an initial guidance of 120 basis points, according to Bloomberg data.

The issuance attracted strong interest from investors, with demand exceeding 10.9 billion dollars, excluding contributions from lead managers.

The issuance came in the form of unsecured sukuk in the "agency sukuk" format, maturing in January 2036, with a settlement date of January 28, 2026. Global banks including "Citigroup", "J.P. Morgan", and "Standard Chartered" served as global coordinators for the offering, alongside participation from several regional and international banks, including "Abu Dhabi Commercial Bank", "Dubai Islamic Bank", "Emirates NBD", "First Abu Dhabi Bank", "HSBC", "Bank of China", "ICBC", "Bank of Sharjah", and "Sharjah Islamic Bank" in the process.

The fund intends to increase its investment spending to about 70 billion dollars annually starting in 2026, with the vast majority of these investments directed towards the local market, after its investments reached 57 billion dollars in 2024, according to its annual report.

Momentum of Saudi Debt Issuances

Saudi debt issuances have seen strong momentum since the beginning of the year, as the government and companies have raised more than 22 billion dollars from international markets so far, with 11.5 billion dollars raised by the government alone.

This comes at a time when the Saudi government is moving to slow down international sovereign bond sales this year, following years of intensive borrowing, with plans to borrow between 14 and 17 billion dollars from external markets during the year, after last year's borrowing approached the record level of 20 billion dollars.