Saudi Real Estate Refinance Company (SRC) will look to issue its first US dollar-denominated Islamic bonds in the first quarter of 2022, market conditions allowing, and also plans to issue sukuk domestically before year-end, its chief executive said on Wednesday.
SRC, wholly owned by Saudi sovereign wealth fund the Public Investment Fund (PIF), is the kingdom’s equivalent of US mortgage finance business Fannie Mae.
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“We intend to issue again in the domestic market before year-end. And from there, we expect to start looking at international markets next year,” SRC CEO Fabrice Susini told Reuters, adding it would be in the first quarter of next year subject to discussions with PIF, banks and market conditions.
The transaction will likely be at least $500 million, Susini said.
“Going below ($500 million) is a bit small, so we will probably be at this amount or above,” depending on factors including asset deployment and SRC’s pipeline, he said.
Issuing in the international debt markets does not mean other financing avenues like domestic sukuk will be shut, Susini said, adding: “all the channels will be open in parallel.”
SRC on Wednesday signed an agreement to buy home financing portfolios worth 300 million riyals from Bank AlJazira.
It expects to close new refinancing agreements with two or three additional banks in the next few months, also expected in the hundreds of millions of riyals, Susini said.
The firm expects to end this year with 15-16 billion riyals worth of refinanced home financing portfolios – including some short-term credit facilities to lenders – on its balance sheet, from 6.5 billion riyals at the end of last year.
On Monday, SRC signed a deal with Real Estate Development Fund (REDF) to refinance a real estate portfolio worth 10 billion riyals, which Susini said would be done in two or three stages.
“The first stage should take place very shortly and we will be probably looking at a couple of billions of SAR in terms of refinancing,” subject to approval, Susini said.