Saudi Arabia Raises $5.5 Billion in Islamic Bond Sale Amid Vision 2030 Push

Saudi Arabia raised $5.5 billion from a two-part Sukuk sale, with orders reaching $17.5 billion, despite lower oil prices and fiscal strains. This brings the kingdom's total international bond issuance to nearly $20 billion for the year, surpassing the full-year 2024 tally and putting it just short of the 2017 record. The government anticipates a fiscal deficit of 2.3% of GDP in 2025, but the IMF projects it could widen to 4%.

Saudi Arabia successfully raised $5.5 billion through a two-part Sukuk sale on September 3, 2025. The sale consisted of a $2.25 billion five-year note and a $3.25 billion 10-year bond. The shorter tranche was priced with a spread of 65 basis points over US Treasuries, while the longer one was sold at 75 basis points [1].

Investor demand was robust, with orders reaching around $17.5 billion, underscoring strong confidence in Saudi debt despite lower oil prices and fiscal strains. This issuance brings Saudi Arabia's total international bond issuance to nearly $20 billion for the year, surpassing the full-year 2024 tally and putting it just short of the 2017 record of $21.5 billion [1].

The proceeds from the sale will be used for general domestic budgetary purposes. Saudi Arabia continues to spend heavily on Crown Prince Mohammed bin Salman’s economic-diversification projects, known as Vision 2030. The kingdom aims to diversify its revenue sources and reduce dependence on hydrocarbon income.

Saudi Arabia’s fiscal deficit is projected to be around 2.3% of GDP in 2025, but the IMF projects it could widen to 4%. The IMF's own forecast is for the Saudi budget deficit to increase to 4% this year, which is considered "quite appropriate" given the country’s high foreign reserves [1].

The latest bond sale adds to a pick-up in syndicated loan activity and a fresh wave of local bank issuance as Saudi companies, the government, and the sovereign wealth fund seek additional financing to support the Vision 2030 agenda. The Kingdom’s ratio of debt to GDP is low by global standards at under 30%, but it is projected to rise to 41% by 2030 [1].

The sale was arranged by Citigroup Inc., HSBC Holdings Plc, JPMorgan Chase & Co., and Standard Chartered Plc, with ICBC and Mizuho banks acting as active joint lead managers [1][2][3].

References:
[1] https://www.bloomberg.com/news/articles/2025-09-03/saudi-arabia-s-5-5-billion-bond-sets-course-for-record-issuance
[2] https://www.zawya.com/en/economy/islamic-economy/saudi-arabia-plans-two-part-islamic-bond-sale-d11lympi
[3] https://www.arabnews.com/node/2614014/business-economy