Saudi Gazette report

RIYADH — The National Debt Management Center (NDMC) was able to repay about SR33 billion, or 43.42 percent, of a total of SR76 billion due for repayment during the year 2022. The center revealed in a recent report that it repaid the debt through the issuance of local bonds.

According to the report, NDMC will issue securities in an optimal way to maintain the average maturity of the Kingdom’s public debt and reduce the risk of refinancing. The center would continue to follow up on liability management, as well as to reduce the risks of refinancing, especially since the average life of the debt portfolio has increased to about 9.5 years at the end of 2021 compared to 9.4 years in 2020.

NDMC expects that the size of the public debt would be stable at SR938 billion by the end of the current year, and the financing needs would amount to about SR43 billion to pay the dues of the principal debt, in addition to the possibility of considering proactive financing operations according to market conditions.

Regarding the principles of securing financing needs in the short, medium and long terms, the center stressed in its report that it was working to sustain the Kingdom’s access to various debt markets to issue sovereign debt instruments at a fair price within well-studied frameworks and foundations for risk management.

The government may consider the possibility of entering additional financing operations proactively through all available financing channels, including debt markets and alternative government financing to finance opportunities that would enhance economic growth such as financing capital projects and infrastructure. NDMC will continue monitoring the market and seize the opportunities in an efficient manner to proactively enhance the characteristics of the debt portfolio, taking into account the expected change in interest rates.

The center announced last month the completion of its 2021 borrowing plan worth SR125 billion. Minister of Finance and Chairman of the Board of Directors of NDMC Mohammed Al-Jadaan made the announcement regarding the conclusion of the annual borrowing plan proposed by the center for the year 2021.

The plan was part of the public debt strategy adopted to meet the financing needs, as well as to seize opportunities available in local and global markets, and manage potential risks. The plan includes the issuance of local debt instruments and debt instruments in foreign currencies. The plan aims to finance government deficit, projects and infrastructure. NDMC seeks to diversify government finance sources, broaden the investor base and capitalize on the available financing opportunities in the market.