Coverage: weekly note · Information to 12 November 2025
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TGB Weekly Research Note · 12 November 2025
Saudi Arabia's monthly riyal sukuk auctions raised more between July and October 2025 than in the whole first half, and in September the Kingdom priced a USD 5.5bn international sukuk on an Ijarah structure.
The desk view
Issuers' own releases show a clear change of pace during 2025. Saudi Arabia's monthly riyal sukuk allocations totalled SAR 19.581bn from January to June and SAR 25.916bn from July to October. The Kingdom's international borrowing in the first half was conventional, before a USD 5.5bn sukuk on 3 September 2025. For Gulf banks, the main effect is more, and longer, local-currency sovereign paper to absorb.
Saudi riyal sukuk accelerated after June
Monthly allocations under Saudi Arabia's riyal sukuk programme were modest in the first half: SAR 9.435bn in the first quarter and SAR 10.146bn in the second. The third quarter alone brought SAR 18.369bn, led by SAR 8.036bn in September, and October added SAR 7.547bn. These auction figures exclude the debt office's May 2025 early repurchase, in which it redeemed about SAR 60.4bn of sukuk due between 2025 and 2029 and issued about SAR 60.3bn of new sukuk maturing between 2032 and 2040.
Maturities also lengthened. The 2039 line took 22.5% of riyal allocations in the first half and 49.4% from July to October.
On 1 August 2025 the debt office said the 2025 borrowing plan, covering a SAR 101bn deficit and about SAR 38bn of repayments, was complete, and that further financing would focus on local and private market channels.
The return to dollar sukuk
Saudi Arabia did not stay out of international markets in the first half, but it used conventional paper: a USD 12bn bond on 7 January 2025 and a EUR 2.25bn deal, including an inaugural green tranche, on 25 February 2025. On 1 August 2025 the debt office said its international financing plan was unchanged, keeping net international issuance below 2024 levels.
The sukuk followed on 3 September 2025: USD 5.5bn from KSA Ijara Sukuk Limited, which the debt office described as the Kingdom's first international issuance based on an Ijarah structure. It comprised a USD 2.25bn 5-year tranche and a USD 3.25bn 10-year tranche, against an order book of around USD 19bn, or 3.5 times the issue. The previous dollar sukuk announced by the debt office, on 29 May 2024, raised USD 5bn from an order book of around USD 20bn.
Steady supply elsewhere in the Gulf
Bahrain's central bank launched long-term Ijara Murabaha sukuk in the second half of 2025: BD 250m for 5 years at an expected 6.00%, then BD 200m for 4 years at 5.75%. The UAE federal Ministry of Finance issued AED 1.1bn of dirham Islamic Treasury Sukuk at both its February and October 2025 auctions. Bids fell from AED 7.1bn to AED 4.57bn, while yields fell from 4.18% (August 2028) and 4.21% (September 2029) to 3.49% (October 2027) and 3.65% (May 2030). The Islamic Development Bank raised USD 1.75bn in March 2025 and said its 2025 funding programme was complete after a EUR 500m green sukuk in October 2025.
Selected Gulf sovereign and supranational sukuk, 2025
| Issuer | Announced | Size | Tenor | Pricing |
|---|---|---|---|---|
| Islamic Development Bank | 11 March 2025 | USD 1.75bn | 5 years | 4.211% |
| Bahrain, domestic | 28 July 2025 | BD 250m | 5 years | 6.00% |
| Bahrain, domestic | 26 August 2025 | BD 200m | 4 years | 5.75% |
| Saudi Arabia, international | 3 September 2025 | USD 5.5bn | 5 and 10 years | Order book USD 19bn |
| Islamic Development Bank | 12 October 2025 | EUR 500m | 5 years | 2.793% |
| UAE federal, domestic | 30 October 2025 | AED 1.1bn | 2 years and to May 2030 | 3.49% and 3.65% |
Source: Islamic Development Bank, IsDB raises US$ 1.75 billion from capital markets through first public sukuk issuance of 2025, 11 March 2025; Central Bank of Bahrain, CBB Long Term Ijara Murabaha Sukuk Issue No.1 Oversubscribed, 28 July 2025; Central Bank of Bahrain, CBB Long Term Ijara Murabaha Sukuk Issue No.2 Oversubscribed, 26 August 2025; NDMC, Saudi Arabia, NDMC announces the completion of USD 5.5 billion trust certificates issuance, 3 September 2025; Islamic Development Bank, IsDB issues another successful green sukuk under enhanced Sustainable Finance Framework, 12 October 2025; Ministry of Finance, United Arab Emirates, Islamic Treasury Sukuk auction for October 2025 attracts bids worth AED 4.57 billion, 30 October 2025.
What it means for banks
The pattern points to Saudi Arabia and Bahrain leaning on domestic sukuk markets for incremental funding in the second half, with dollar sukuk used selectively. For banks and other local investors this means more long-dated sovereign sukuk to absorb, and a larger duration position if they keep pace with the auctions.
What to watch
- Further Saudi financing during 2025 expected to focus on local and private market channels
Primary sources: NDMC, Saudi Arabia, NDMC closes the January 2025 issuance under the Saudi Arabian Government SAR-denominated Sukuk Program, 21 January 2025; NDMC, Saudi Arabia, NDMC closes the February 2025 issuance under the Saudi Arabian Government SAR-denominated Sukuk Program, 18 February 2025; NDMC, Saudi Arabia, NDMC closes the March 2025 issuance under the Saudi Arabian Government SAR-denominated Sukuk Program, 18 March 2025; NDMC, Saudi Arabia, NDMC closes the April 2025 issuance under the Saudi Arabian Government SAR-denominated Sukuk Program, 22 April 2025; NDMC, Saudi Arabia, NDMC closes the May 2025 issuance under the Saudi Arabian Government SAR-denominated Sukuk Program, 20 May 2025; NDMC, Saudi Arabia, NDMC closes the June 2025 issuance under the Saudi Arabian Government SAR-denominated Sukuk Program, 24 June 2025; NDMC, Saudi Arabia, NDMC closes the July 2025 issuance under the Saudi Arabian Government SAR-denominated Sukuk Program, 15 July 2025; NDMC, Saudi Arabia, NDMC closes the August 2025 issuance under the Saudi Arabian Government SAR-denominated Sukuk Program, 19 August 2025; NDMC, Saudi Arabia, NDMC closes the September 2025 issuance under the Saudi Arabian Government SAR-denominated Sukuk Program, 16 September 2025; NDMC, Saudi Arabia, NDMC closes the October 2025 issuance under the Saudi Arabian Government SAR-denominated Sukuk Program, 14 October 2025; NDMC, Saudi Arabia, NDMC announces the completion of USD 5.5 billion trust certificates issuance, 3 September 2025; NDMC, Saudi Arabia, NDMC announces the completion a USD 5 billion trust certificates issuance, 29 May 2024; Central Bank of Bahrain, CBB Long Term Ijara Murabaha Sukuk Issue No.1 Oversubscribed, 28 July 2025; NDMC, Saudi Arabia, NDMC announces the completion of the offering of international bonds in USD under the Kingdom's GMTN programme with a total value of USD 12 billion, 7 January 2025; NDMC, Saudi Arabia, NDMC announces the completion of an international euro-denominated bond issuance including the inaugural green tranche, EUR 2.25 billion, 25 February 2025; Central Bank of Bahrain, CBB Long Term Ijara Murabaha Sukuk Issue No.2 Oversubscribed, 26 August 2025; NDMC, Saudi Arabia, With a value exceeding SAR 60 billion, NDMC completed arranging the sixth early repurchasing transaction on the local market, 25 May 2025; NDMC, Saudi Arabia, The National Debt Management Center announces the completion of the borrowing plan (2025), 1 August 2025; Ministry of Finance, United Arab Emirates, Islamic Treasury Sukuk auction for February 2025 attracts bids worth AED 7.1 billion, 26 February 2025; Ministry of Finance, United Arab Emirates, Islamic Treasury Sukuk auction for October 2025 attracts bids worth AED 4.57 billion, 30 October 2025; Islamic Development Bank, IsDB raises US$ 1.75 billion from capital markets through first public sukuk issuance of 2025, 11 March 2025; Islamic Development Bank, IsDB issues another successful green sukuk under enhanced Sustainable Finance Framework, 12 October 2025.