Saudi Arabia raised $9 billion in its first global Islamic bond issue. The sale of Islamic bonds, known as sukuks, comes after the kingdom in October turned to the conventional global debt market for the first time, raising $17.5 billion in a bond issue.
Saudi Arabia has also sold domestic bonds and drawn on its accumulated reserves, all in an effort to reform the economy and address budget deficits caused by a collapse in oil revenues since 2014.
The ministry of finance received significant interest for the first international issue of the sukuk program with an order book from investors in excess of $33 billion.
There will be two tranches of $4.5 billion, one maturing in 2022 and another in 2027, reflecting the strong fundamentals of the Saudi economy.
Islamic financial instruments including sukuks are structured to comply with Islamic law, which does not allow the payment of interest.
Saudi Arabia has forecasted a budget deficit of $53 billion this year, after an even bigger shortfall last year prompted subsidy cuts and delays in major projects.