Saudi Arabia's National Debt Management Center (NDMC) has completed its 2021 borrowing plan worth over $33.3 billion as 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.
NDMC asserted it was working to broaden the investor base, open communication channels with the investors locally and internationally, and enter new geographical regions.
The Center's Chairman, Finance Minister Mohammed al-Jadaan, highlighted that NDMC's board of directors had approved the proposal of the annual borrowing plan at the beginning of the year.
He indicated that the plan covered the financing needs by issuing $33.3 billion debt instruments, including Sukuk and bonds, which focused on fixed-rate instruments to hedge against risks of potential interest rate fluctuations.
Jadaan indicated that NDMC succeeded in arranging the issuance of sovereign bonds worth €6.8 billion, with the most significant negative yield issuance ever out of the EU, with a coverage ratio of 3.3 times (equivalent to €11.3bn) of the total issuance, which displays the leading position of the Kingdom in global markets.
The Center successfully arranged for the financing of $3 billion provided by Korea Trade Insurance Corporation (KSURE) earlier this year. Additionally, NDMC arranged the second early repurchase of part of bonds and Sukuk maturing next year of a value exceeding $8.8 billion.
The Minister announced that 60.5 percent of the debt raised in 2021 was from local sources. The remaining 39.5 percent was made up of international borrowing.
Additionally, several financing channels were utilized, such as government alternative funding and early repurchase of local government issuances.
Work has also started on structuring the green financing framework, one of the ministry's new initiatives and debt-raising channels set to launch next year.
The Minister pointed out that the Kingdom's credit rating has been revised in terms of outlook by credit rating agencies to "stable" affirms the efficiency of the fiscal system, its ability to overcome challenges, its forward-looking approach, and its efforts in developing plans to address these challenges.
Acting CEO Hani al-Medaini said NDMC was working to broaden the investor base, open communication channels with the investors locally and internationally, and penetrate new geographical regions.
He added that NDMC was working with international financial institutions to join the Primary Dealers Program of the Government Local Debt Instruments, attract new foreign capitals to utilize the opportunities available in debt instruments arranged by NDMC, and seize opportunities in local and international markets.
