Issuance in local currency will remain "alive and active,"
Susini said, adding the firm could eventually issue
euro-denominated bonds "if at one point the rates are attractive
enough and interest is there," while hedging would also be a
consideration.
The impact of rising rates on SRC has been "limited" as
roughly 70% to 80% of its mortgages are fixed rate, Susini said.
New residential mortgages provided by banks fell 23.4% last
year to 154,392, having already dropped 10.5% in 2021 from 2020,
data from SAMA showed.
"There is the cost for mortgage borrowers that could put
some of them off buying. And then there is also perhaps a slight
slowdown with the banks which see these prices going up and not
being sure of what conditions they will refinance themselves,"
Susini said.
SRC has no plans currently in place for an initial public
offering but it "could make sense" in the coming years, Susini
said, adding PIF would keep at least a 51% stake.
(Reporting by Yousef Saba; Editing by Kim Coghill)
By Yousef Saba
DUBAI, Feb 1 (Reuters) - The Saudi Real Estate Refinance
Co (SRC), the kingdom's equivalent of U.S. mortgage finance
business Fannie Mae, plans to issue debut dollar-denominated
sukuk between the end of the first and second quarters of this
year, its chief executive said.
The company, a regular issuer of local currency Islamic
bonds, initially aimed to issue its inaugural dollar sukuk last
year.
SRC, owned by the sovereign Public Investment Fund, is
working to help Saudi Arabia reach its goal of boosting Saudi
home ownership to 70% as part of "Vision 2030" reforms to reduce
the economy's reliance on oil.
Some of the documentation for the dollar issuance "needed to
be revamped, readjusted with some discussions with some of our
stakeholders," SRC CEO Fabrice Susini told Reuters, without
giving details.
SRC will raise at least $500 million, Susini said. JPMorgan,
Societe Generale, GIB, HSBC and Islamic Development Bank, which
set up the dollar issuance programme, will arrange the debt
sale, he added.
"We were a bit lucky ... not having to issue
internationally" last year, he said, as the U.S. Federal Reserve
hiked rates at a rapid clip to tame decades-high inflation, with
the Saudi Central Bank (SAMA) closely mirroring the moves
despite lower inflation, as the riyal is pegged to the dollar.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.