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One of the most in-demand borrowers in the GCC is contemplating a return to both sukuk and asset-backed finance markets in the coming months, according to 9fin sources.
Saudi Real Estate Refinance Company (SRC) plans to bring another tranche from its $10bn international sukuk programme in the autumn and will also look to replicate a first-of-its-kind unwrapped RMBS deal it signed in October last year.
SRC (A1/A/A+) is backed by Saudi Arabia’s Public Investment Fund and is often likened to Freddie Mac and Fannie Mae in the US. It plays a central role in Saudi Arabia's housing finance system by purchasing or refinancing mortgage portfolios from local banks.
Saudi banks have experienced periods of strong loan growth outstripping deposit growth. This has increased the importance of alternative funding channels that free up balance sheet capacity without requiring banks to raise more wholesale funding.
Proceeds from SRC’s sukuk issuances provide fresh funding for those activities, allowing lenders to recycle capital into new home loans rather than holding mortgages on their balance sheets for decades. The obligations are guaranteed by the...
