Saudi Arabia’s first green sukuk issuance: The Kingdom raked in EUR 1.5 bn from its (and MENA’s) first sovereign EUR-denominated green international sukuk issuance, Bloomberg reported, citing an unnamed source. The seven-year green note — which was 4.9x oversubscribed — drew in some EUR 7.3 bn in orders. The issuance was priced at a spread of 115 basis points (bps) above its benchmark, after the pricing was tightened from an original 155 bps spread.

The green tranche was sold alongside a EUR 750 mn conventional sukuk that saw orders topping EUR 2.7 bn, priced at 145 basis points above mid-swaps, according to the source.

The proceeds will be used to cover projects that align with the Kingdom’s greenfinancing framework(pdf), in which it identifies eight types of green projects to be funded through the sale of the bonds. The Kingdom’s first push into green sukuk also comes as part of efforts to boost its clean energy transition away from fossil fuels, which remains the cornerstone of the economy.

The Kingdom is set to have a busy year in the debt market: Saudi Arabia’s debt capital market could top USD 500 bn by the year-end, up from the USD 430 bn registered at the end of 2024, as the government turns to debt markets to fund diversification efforts.

“Their appetite to borrow is big, and the market is currently happy to fund them at decent spreads,” Mashreq Managing Director Mohamed Ahsan told Bloomberg.

ADVISORS- HSBC, JP Morgan, and Société Générale were tapped as global coordinators and joint active bookrunners for the issuance, while Crédit Agricole CIB and SNB Capital will work passively. HSBC and JP Morgan also acted as joint green structuring agents.

Tags: