Saudi Arabia has raised $3.25 billion through a two-tranche international sukuk sale after attracting orders of around $16.5 billion, highlighting strong investor demand for the Kingdom’s Islamic debt.
The National Debt Management Center said the order book was roughly five times the size of the offering. The transaction was carried out under Saudi Arabia’s Global Trust Certificate Issuance Program.
Issued by KSA Ijara Sukuk Limited, the sale was the Kingdom’s second international sukuk offering based on an Ijarah structure, which uses leasing arrangements. The first tranche raised $1.25 billion through five-year sukuk maturing in 2031.
The second tranche raised $2 billion through 10-year sukuk due in 2036.
The strong demand comes as Saudi Arabia continues to raise funds in international and domestic debt markets to cover its expected budget deficit and refinance debt approaching maturity.
Under its 2026 borrowing plan, the Kingdom estimates total financing needs of up to SR217 billion ($57.71 billion). This includes a projected budget deficit of SR165 billion and around SR52 billion in principal repayments on existing debt.
The government expects between 25 per cent and 30 per cent of its planned borrowing to come from international debt markets. US dollar-denominated bonds and sukuk are expected to remain a major part of that programme, although Saudi Arabia has retained the option of issuing debt in other currencies and markets.
The latest transaction is part of the National Debt Management Center’s efforts to broaden the Kingdom’s investor base and secure financing through international capital markets when market conditions are favorable.
Saudi Arabia first used the Ijarah structure for an international sukuk in September 2025, raising $5.5 billion. That transaction consisted of $2.25 billion in five-year certificates due in 2030 and $3.25 billion in 10-year sukuk maturing in 2035.
The 2025 sale attracted about $19 billion in orders, equal to 3.5 times the amount issued. While the latest order book was smaller in absolute terms, the subscription level was stronger at around five times the offering.
In May, the debt management center said it had secured about 90 per cent of the Kingdom’s funding requirements before geopolitical tensions intensified in the region. It said it would continue watching international debt markets and consider new transactions when suitable opportunities emerged.
The latest international sale follows a domestic sukuk issuance in August, when Saudi Arabia allocated SR9.518 billion across five tranches with maturities ranging from 2031 to 2041.
Saudi Arabia’s public debt is expected to rise to about SR1.62 trillion by the end of 2026, equivalent to 32.7 per cent of gross domestic product. That compares with estimated debt of SR1.46 trillion, or 31.7 per cent of GDP, at the end of 2025.
