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Jeddah - Yasmine El Tohamy - RIYADH: Saudi Arabia has expanded access to its local bond markets by appointing five more financial institutions as primary distributors of government debt instruments.
The Ministry of Finance and the National Debt Management Center signed these deals with Albilad Investment Co., AlJazira Capital Co., and Al Rajhi Capital Co., as well as Derayah Financial Co., and Saudi Fransi Capital Co.
These institutions join the existing roster of local financial entities in the primary dealers program, which includes Saudi National Bank, Saudi Awwal Bank, AlJazira Bank, as well as Alinma Bank, and AlRajhi Bank.
These developments are set to diversify the investor base, providing investors with enhanced opportunities to participate in the local debt market through additional distribution channels
BNP Paribas, Citigroup, and Goldman Sachs are among the international firms in the program, alongside J.P. Morgan and Standard Chartered Bank.
The Saudi debt market has evolved significantly, marked by robust growth and increased investor participation. Government initiatives, such as expanding the primary dealers program to include international and local financial institutions, underscore efforts to enhance market liquidity and attract diverse investor interest.
These agreements underscore the NDMC’s pivotal role in enhancing access to Saudi Arabia’s local debt markets.
Applications for subscription in the government's local debt instruments are submitted to the center through appointed primary dealers on a scheduled monthly basis, with these dealers handling submissions from investors.
The Capital Markets Authority has recently proposed a new set of reforms aimed at facilitating access to Saudi Arabia’s debt market for development funds, banks, and sovereign wealth organizations.
These reforms are designed to streamline regulations, enhance market accessibility and stimulate growth.
The initiative seeks to expedite company financing through sukuk and other debt instruments, reduce issuance costs, increase the number of offerings, and position the market as a key avenue for business and economic financing.
According to S&P Global, driven by Vision 2030’s ambitious economic goals, Saudi Arabia’s debt market evolution is expected to surpass developments in some mature markets, initially led by government-related entities, major financial institutions, and prominent corporate entities.
The NDMC concluded the June issuance under Saudi Arabia’s Government SR-denominated Sukuk Program, allocating a total of SR4.41 billion ($1.18 billion) across three tranches: SR1.6 billion maturing in 2027, SR53 million maturing in 2031, and SR2.76 billion maturing in 2034.
These tranches are designed to diversify funding sources and support the Kingdom’s economic development efforts.
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