The Ministry of Finance announced that it has completed accepting additional investor applications for its domestic sukuk issuance by reopening its fourth offering for the second time under the Kingdom’s Riyal-denominated government sukuk program. The previous offering took place in October of this year, with the total value of new subscription orders for these sukuk reaching approximately 10.325 billion riyals.
More than 4 billion riyals
The size of the reopened offering was set at a total of 4.775 billion riyals, with a coverage ratio of 216 percent. The additional issuances were divided into three tranches as follows: the first tranche amounts to 2.400 billion riyals for sukuk maturing in 2022; the second tranche amounts to 1.800 billion riyals for sukuk maturing in 2024; and the third tranche amounts to 0.575 billion riyals, maturing in 2027.
Thus, the total value of the October 2017 issuance amounts to 21.455 billion riyals. Accordingly, the fourth issuance is fully closed, and the total value of its tranches is as follows: the first tranche amounts to 7.600 billion riyals, the second tranche amounts to 6.680 billion riyals, and the third tranche amounts to 7.175 billion riyals.
Financing 12 Projects
On the other hand, as part of efforts to enhance basic services provided to citizens by activating the role of the private sector in development areas, the Ministry of Finance—within the framework of the government lending program – to finance 12 health, education, and hospitality projects with total loans amounting to 851 million riyals. The total investment for these projects reached 2.2 billion riyals. Approval was granted to finance the construction of five health projects with a capacity of 1,370 beds and a total floor area of 419,291 square meters, distributed across four cities: Riyadh, Al-Khobar, Bisha, and Abha. Approval was also granted to finance the construction of a private university in Madinah with a floor area of (13,820) m², as well as the approval of funding for six hotel and tourism projects with a total floor area of (56,202) m², distributed across six cities: Al-Kharj, Sharurah, Najran, Tabuk, Jazan, and Al-Khobar.
Domestic Lending Program
In light of this, Mr. Tariq Al-Shahib, Undersecretary of the Ministry of Finance for Revenue Affairs and supervisor of the Domestic Lending Program, explained that the Ministry seeks to support development goals and the Kingdom’s Vision 2030 by providing the necessary financing to support the private sector and enhance the economy’s capacity to generate diverse job opportunities. It should be noted that these loans are part of government lending programs offered by the state to encourage the private sector to invest in service projects in regions that need such services. Upon completion, these projects will support —the private sector’s role in providing services and improving their efficiency, thereby complementing the services the state provides to citizens
