United Arab Emirates: About 7 Billion Dollars Raised from Sale of Government Bonds and Sukuk
In Saudi Arabia, oil and gas company Saudi Aramco announced the issuance of dollar-denominated sukuk aimed at “global investors”
In 2022, the United Arab Emirates launched an operation to sell government bonds, as well as so-called sukuk denominated in the Emirates’ currency, the dirham. And on Sunday, September 29, the United Arab Emirates Ministry of Finance announced the preliminary results of a maxi-finance operation that has raised 25 billion dirhams, or $6.8 billion, over the past two years.
The Ministry of Finance stressed that both programs were “successes,” reflecting “strong investor confidence” and “strengthening the Emirates’ position as a competitive hub for global investment.”
Sukuk are debt securities issued under the strict rules of Shariah – literally “a beaten path, a path leading to a spring from which to drink” – which is a set of rules for human life and behavior in the Muslim world prescribed by Allah that include the moral, religious, and legal conduct of believers.
The Ministry of Finance in Abu Dhabi also recalled that in the first half of 2024, the United Arab Emirates “was the second largest issuer in the Gulf Cooperation Council (GCC) bond market, with $20.6 billion raised in 65 issues, compared to $15.4 billion raised in the same period last year in 58 issues.
In first place is Saudi Arabia, which between January and June 2024 organized 44 issuances that brought a total of $37 billion to the kingdom’s public coffers. On September 29, it was announced that Saudi Aramco, the Saudi oil and gas company, would issue a dollar-denominated sukuk aimed at “global investors.” According to a press release issued by Tadawul Exchange, the sukuk will be issued under the Saudi Aramco Global Sukuk Limited’s Trust Certificate Issuance Program and will be “direct, unsubordinated, and unsecured obligations.”
The size of the issue has not been determined: it will depend on market conditions and investor demand at the time of placement. “Proceeds from the issuance,” Saudi Aramco said in a press release, “will be used for general corporate purposes, with a particular focus on supporting Saudi Aramco’s strategic initiatives, improving its balance sheet and financing the expansion of its global operations.” The sukuk issuance reflects Saudi Aramco’s long-term corporate ideology to “ensure financial sustainability and operational efficiency while adapting to the dynamic global energy landscape.”
