PIF Announce Pricing of $1.25 Billion Global Sukuk Offering

Sukuk issuances in Saudi Arabia continues unabated with the Kingdom’s sovereign wealth fund -Public Investment Fund (PIF) on Thursday announced the pricing of a $1.25 billion sukuk offering. The proceeds of the dollar-denominated offering will be used for PIF’s general corporate purposes.

The seven-year sukuk was more than 6.5 times oversubscribed, with orders exceeding $9 billion and the sukuk will be listed on the London Stock Exchange’s International Securities Market as part of PIF’s international sukuk issuance program.

Ahmed Alrobayan, Head of Public Markets, Global Capital Finance, at PIF, said that the strong investor demand for this new sukuk offering underscores PIF’s robust credit profile, along with its role as a key driver of Saudi Arabia’s economic transformation.

The transaction represents a continuation of our established and diversified financing strategy, which draws strong support from international investors, Alrobayan added.

PIF’s long-term capital-raising strategy includes a diverse range of instruments, including sukuk and bond programs. Earlier this year, PIF completed its inaugural murabaha credit facility and last August renewed a revolving credit facility. PIF is rated Aa3 by Moody’s with a stable outlook, and A+ by Fitch, also with a stable outlook.

Saudi Issuers Dominate

It may be mentioned here that Saudi Arabian issuers have emerged as a dominant force in the foreign currency sukuk market, alongside Malaysia and Indonesia.

In 2024, the kingdom’s banks and corporates stepped up their activity, contributing significantly to the region’s issuance surge. Kuwait, Qatar, and Oman also saw increased issuance, though the UAE recorded a slight decline.

Sukuk offers an important avenue for Saudi borrowers to access liquidity while diversifying their funding base, foreign-currency issuance is expected to remain high in 2025. Saudi Arabia’s growing presence in the global sukuk landscape underscores its ambitions to cement its position as a leading Islamic finance hub, according to Standard & Poor’s (S&P).

S&P said that in 2025, they not only expect monetary easing to continue, but also think financing needs in core Islamic finance countries will remain high and lead issuers to take any opportunity the market has to offer.

“We therefore forecast that the volume of foreign currency-denominated sukuk issuance will reach $70 billion to $80 billion in 2025. It is worth noting that we did not see significant activity by non-traditional issuers in this area in 2024 and we expect such activity to remain sporadic in 2025,” S&P said.

Riyal-Dominated Sukuk

Meanwhile, The Kingdom has closed on its riyal-denominated sukuk issuance for March 2025, with a total allocation of $703.2 million.

The local offering in March brought the total sukuk allocation in the first quarter of this year to $2.52 billion so far. While 990 million sukuk was issued in January, $820 million sukuk was issued in February and &703.2 million in March this year.

The sukuk issuance in March under the Saudi Arabian Government’s Saudi riyal-denominated sukuk Program was split into four tranches, with the first, amounting to $97.06 million, set to mature in 2027.

The second tranche of $84.26 million will mature in 2029, the third tranche of $390 million and fourth ($133.33 million) will mature in 2032 and 2039, respectively, according to the National Debt Management Centre (NMDC).

S&P said that the sukuk market is forecast to stay upbeat this year, with global issuances likely to be between $190 billion and $200 billion, according to S&P.

The ratings agency noted a 29% jump in foreign-currency issuance to $72.7 billion as of December 2024, thanks largely to issuers from GCC countries led by Saudi Arabia, as well as Malaysia and Indonesia.