Saudi national debt office completes $33bn borrowing plan
COMMERCIAL NEWS
Saudi Arabia's National Debt Management Center (NDMC) has completed its 2021 borrowing plan worth over SR125 billion ($33.3 billion), reported SPA, citing the finance minister
Announcing the conclusion of the annual borrowing plan, Mohammed bin Abdullah Al Jadaan, who is also the chairman of NDMC, announced that 60.5% of the debt raised in 2021 was from local sources. The remaining 39.5% was made up of international borrowing.
The plan is part of the public debt strategy adopted to meet the financing needs, and seize the opportunities available in local and global markets, and manage potential risks, he stated.
Al Jadaan highlighted that NDMC's board of directors has approved the proposal of the annual borrowing plan at the beginning of the year. The plan covered the financing needs by issuing SR125 billion debt instruments, including sukuk and bonds, which focused on fixed-rate instruments to hedge against risks of potential interest rate fluctuations.
Al Jadaan indicated that NDMC succeeded in arranging the issuance of sovereign bonds worth euro 6.8 billion, with the largest negative yield issuance ever out of the EU, with a coverage ratio of 3.3 times (equivalent to 11.3bn euros) of the total issuance, which displays the leading position of the Kingdom in global markets.
On another front, NDMC successfully arranged for financing of $3 billion provided by Korea Trade Insurance Corporation (KSURE) earlier this year. Additionally, NDMC arranged as well the second early repurchase of part of bonds and sukuk maturing next year (2022) of a value exceeding SR33 billion.
The minister pointed out that the kingdom's credit rating has been revised in terms of outlook by credit rating agencies to "stable". This testifies to the efficiency of fiscal system, its ability to overcome challenges, its forward-looking approach, and its efforts in developing plans to address these challenges, he added.
Acting CEO Hani bin Medaini Al Medaini said NDMC was working to broaden the investor base, open communication channels with the investors locally and internationally, and to penetrate to new geographical regions.
He added that NDMC was working with international financial institutions for joining the Primary Dealers Program of the Government Local Debt Instruments, and attracting new foreign capitals to utilize the opportunities available in debt instruments arranged by NDMC, and seizing opportunities in local and international markets.
