Moody’s this week assigned a top rating to the government’s Riyal-denominated Islamic bond program.
Such ratings are used by investors to gauge the creditworthiness of countries and companies.
Moody’s issued a provisional (P) A1 senior unsecured MTN global scale rating and Aaa.sa senior unsecured national scale rating to the government’s sukuk program.
Finance Minister Mohammed Al-Jadaan said the rating reflected “the strength, flexibility and capability of the Kingdom’s economy in facing global economic challenges.”
Gulf states including Saudi Arabia are selling Islamic bonds, also known as sukuk, to help fund public spending and infrastructure projects amid weaker oil prices and the ongoing economic fallout from the coronavirus pandemic.
National Debt Management Center CEO Fahad Al-Saif, said that the move by Moody’s showed “the depth of the local debt market by providing a risk-free yield curve.”
The introduction of the national scale rating is expected to further attract foreign investors in