Saudi Arabia taps French bank to expand local debt market

Arab News

27-07-2025

RIYADH: The Saudi Ministry of Finance and the National Debt Management Center have signed an agreement appointing France's Societe Generale as a primary dealer for the Kingdom's local debt instruments, according to an official statement.
Societe Generale will join five other international institutions already operating as primary dealers, namely BNP Paribas, Citigroup, and Goldman Sachs, as well as J.P. Morgan, and Standard Chartered Bank.
As part of ongoing efforts to deepen and diversify its domestic debt market under Vision 2030, the Ministry of Finance and the NDMC have taken new steps to strengthen the role of international and local institutions in supporting sukuk and bond issuance.
'This agreement fits within the Financial Sector Development Program strategy as a step toward achieving the objectives of Saudi Vision 2030 by strengthening financial sector institutions and advancing the financial market,' NDMC stated.
The NDMC stated that the deal reaffirms its role in enhancing access to local debt markets by diversifying the investor base. This approach aims to ensure sustainable access to the secondary market and support its growth.
'It is noteworthy that applications for subscription in the primary market for the government's local debt instruments are submitted to the NDMC through the appointed primary dealers on a scheduled monthly basis where these dealers receive the applications submitted by investors,' the statement said.
The French bank will also be added to the list of 10 local institutions participating in the program, including Saudi National Bank, Saudi Awwal Bank, and AlJazira Bank, as well as Alinma Bank, AlRajhi Bank, Albilad Capital, AlJazira Capital, AlRajhi Capital, Derayah Financial Co., and Saudi Fransi Capital.
The Kingdom's sukuk market has witnessed significant growth in recent years, underpinned by its strategic role in the Kingdom's Vision 2030 economic diversification plans. In the first quarter of 2025, corporate bond and sukuk issuance more than doubled to $37 billion, up from $15.5 billion in the same period of 2020.
Saudi Arabia accounted for more than 60 percent of all sukuk and bond issuance across the Gulf Cooperation Council during that period, according to the Kuwait Financial Center, also known as Markaz.
The NDMC surpassed the $1 billion threshold with its May sukuk issuance, raising SR4.08 billion ($1.08 billion)—a 9.09 percent increase from April and a 54.5 percent rise compared to March's SR2.64 billion.
In June, the NDMC raised SR2.355 billion, marking a decline from May but demonstrating typical monthly funding fluctuations.
The July issuance rebounded sharply to SR5.02 billion, an increase of 113.6 percent month on month. That issuance was split into tranches maturing in 2029, 2032, 2036, and 2039.
According to S&P Global, the Kingdom's domestic debt markets are expected to expand further amid Vision 2030 reforms, with sovereign and corporate issuance at 20.7 percent of gross domestic product and corporate debt alone rising from 1.9 percent in 2020 to 3.4 percent in early 2025.