Early this year, a Kuwait-based financial firm said that Saudi Arabia’s bond and sukuk maturities are expected to increase to $168bn by 2029, a figure that is set to outpace other members of the GCC. The study reveals that a major part of these materials will be borne by the Saudi government, with $110.2 billion likely to occur over five years.
Here the report observed new issuance for global debt markets as Saudi Arabia increasingly turns to debt markets to finance the ambitious Vision 2030 plan. "These maturities are a direct outcome of the government's push to diversify its economy and reduce its dependence on oil revenues," said a senior analyst at the financial firm.
By mid-December 2024, the total value of bond and sukuk issuances had risen to $182.7 billion, a significant increase from $116.2 billion in 2023. This growth was primarily driven by a 48.5% year-on-year surge in corporate issuances, which climbed from $71 billion in 2023 to $105.4 billion in 2024. Government issuances also experienced a sharp rise, reaching $77.3 billion—a 71.1% increase compared to the previous year.
The government has also initiated major reforms in matters to do with the structure of the financial systems and the relief from regulatory restraints. "Simplifying the prospectus requirements for public, private, and exempt offerings has been a critical step," an official familiar with the matter said. "This allows for faster issuance of bonds and sukuk, enhancing liquidity in the market."
Another expert commented on the broader implications of these reforms: "While these maturities highlight the country's increased borrowing, they also underscore investor confidence in the Saudi economy. It is a precarious tightrope to walk, but what reforms are doing is gradually building up the framework for a stronger finance industry.
Once again, this report states that Saudi Arabia can handle the increased maturities that bonds and sukuk worldwide are expected to experience in the future through its economic diversification and global investor attraction.
