Saudi Real Estate Refinance Company (SRC) is planning to issue up to $1.1 billion of long term sukuk (Islamic bond) that is being modelled on the lines of US mortgage finance firm Fannie Mae.

The plan by SRC which is 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.

CEO Fabrice Susini stated that SRC is also keen to tap foreign institutional investors for its debt sale this year.

Susini revealed that our strategy is clearly to tap the market twice this year.

He added, “We are really looking at probably issuing something between … SR2 and SR4 billion that we may be issuing in two tranches. 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.”

Saudi Real Estate Refinance Company was assessing whether it could also issue bonds in currencies other than the local riyal. Additively, 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.

Source: Trade Arabia

Fulya Altunyay/