Saudi Real Estate Refinance Company (SRC) is planning to issue up to $1.1bn of long-term sukuk as it prepares to purchase more home loan portfolios from mortgage financing companies and banks to boost the Kingdom’s secondary mortgage market.
According to a Reuters report, the plan by SRC, which is a subsidiary of Saudi Arabia’s sovereign Public Investment Fund, is being modelled along the lines of US mortgage finance firm, Fannie Mae, citing SRC’s top official.
Fabrice Susini, CEO, said in an interview that SRC is keen to tap into foreign institutional investors for its debt sale this year.
“Our strategy is clearly to tap the market twice this year,” he said. “We are really looking at probably issuing something between … $533 million and $1 billion that we may be issuing in two tranches,” revealed Susini.
He added that 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,” he explained, adding that the company was assessing whether it could also issue bonds in currencies other than the local riyal.
Formed in 2017, SRC recently completed a $200m sukuk issue with multiple tenors, under a programme that allows for the issue of up to $2.93bn of local currency denominated Islamic bonds.