Arab News
Arab News, Wed, Feb 05, 2025 | Shaaban 6, 1446
Mining firm Ma’aden to issue US dollar-denominated sukuk
Saudi Arabia:
The Saudi Arabian Mining Co., or Ma’aden,
intends to issue US dollar-denominated sukuk under its International Trust
Certificate Issuance Program, scheduled to launch Feb. 4, a bourse filing
revealed.
Released on the Saudi Stock Exchange, the
statement explained that the offer, which will be utilized for general corporate
purposes, comes following approval from the firm’s board of directors on Dec. 18
and shareholders’ approval on Feb. 3.
The issuance of the Shariah-compliant bonds is
expected through a special purpose vehicle and will be offered to eligible
investors both inside and outside the Kingdom.
The move aligns with projections that global sukuk
issuance will reach between $190 billion and $200 billion in 2025, driven by
increased activity in key markets like Saudi Arabia and Indonesia, according to
an analysis from S&P Global in January.
The Tadawul statement further highlighted that
Ma’aden appointed Citigroup Global Markets Limited, HSBC Bank plc, and Al Rajhi
Capital Co., as joint lead managers for the offering, as well as BNP Paribas,
GIB Capital, and J.P. Morgan Securities.
Natixis, Saudi Fransi Capital, SNB Capital,
and Standard Chartered Bank were also appointed to the role.
The amount and terms of offer of the Trust
Certificates will be determined subject to the market conditions.
The Kingdom’s banking sector is experiencing a
surge in activity in debt and sukuk markets as leading financial institutions
move to strengthen their capital bases and fund strategic growth initiatives.
Al Rajhi Bank, Banque Saudi Fransi, and Arab
National Bank are among the key players announcing substantial issuances to tap
local and international investors.
This wave in activity supports the Capital Market
Authority’s objective of transforming the nation’s investment market into a key
pillar of its economy, as outlined in Vision 2030.
The plan emphasizes expanding financing options,
promoting funding opportunities, and attracting international investors.
The CMA’s strategy seeks to expand the debt
instruments market to 24.1 percent of gross domestic product by 2025 by
implementing regulatory reforms, improving market accessibility, and
streamlining issuance processes.
Global sukuk issuances totaled $193.4 billion in
2024, a slight decrease from $197.8 billion in 2023. Despite this marginal
decline, the market saw a 29 percent year-on-year increase in
foreign-currency-denominated sukuk, surging to $72.7 billion in 2024.