Saudi Arabia raises $3.25 billion in two-tranche sukuk sale, IFR reports

Saudi Arabia has raised $3.25 billion in a two-tranche sale of US dollar-denominated Islamic bonds, or sukuk, IFR reported on Tuesday, marking the kingdom’s second debt market transaction this year and its first since tensions with Iran escalated.

The issuance comprised $1.25 billion of five-year sukuk and $2 billion of 10-year sukuk, priced at final spreads of 70 and 80 basis points respectively over US Treasuries, IFR said.

Demand was strong, with combined orders exceeding $15 billion, the report said, adding that the proceeds would be used for general domestic budgetary needs.

Citi, Goldman Sachs International, HSBC, JPMorgan and Standard Chartered acted as global coordinators and joint bookrunners.

Abu Dhabi Islamic Bank, BNP Paribas, Dubai Islamic Bank, Fubon Bank, ING, Intesa Sanpaolo, Aljazira Capital and Société Générale were passive joint lead managers.

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In January, the kingdom raised $11.5 billion through a four-part bond sale under its 2026 borrowing plan, which targets about $57.9 billion to cover a projected fiscal deficit of roughly $44 billion and repay around $13.9 billion of debt due this year.

Last week, Saudi Arabian Mining Company (Ma’aden) raised $1 billion through its inaugural international term loan and revolving credit facilities to support general corporate needs and committed funding capacity.

Saudi Arabia’s real gross domestic product contracted 4.8% year-on-year in the second quarter, largely due to a sharp 24.7% decline in oil-sector activity, preliminary government estimates showed.