Inside Indonesia’s new sovereign wealth fund
23 March, 2021
Francesco de Ferrari leaves AMP – could he ever have won?
1 April, 2021Euromoney, March 29 2021
Ever since the launch of Vision 2030, housing has been a key priority for Saudi Arabia. Along with the home building has come a vibrant mortgage market, the formation of a secondary liquidity provider and the building blocks that will lead to a new securitized asset class in global markets.
Could Saudi Arabian mortgages be the next major securitized asset class in the international debt markets? There is a long way to go, but there is a swell of momentum, driven by the state’s long-term ambitions around house financing. A first international issue from Saudi Real Estate Refinance Company (SRC), the local equivalent of Fannie Mae set up in 2017, should hit the markets later this year and will be closely watched.
“We aim for an international inaugural issuance before the year end,” says Fabrice Susini, the ex-BNP Paribas banker who leads SRC as chief executive. “We don’t know yet if we will issue a bit before the summer or after the summer, but that’s what we are working towards. There is a lot of work going on behind the scenes.”
When it comes, the international issue – which for the moment will likely be a corporate sukuk in the name of SRC rather than a mortgage-backed issue – will nevertheless represent the culmination of several years of development of this interesting young entity. On the plus side has been the sense of national priority backed by some of the most powerful people and institutions in the Kingdom. On the negative, it can be difficult to buy mortgage pools from banks that have been on to a very good thing in writing them and haven’t had much incentive to get them off their books.
The story starts with demographics. Saudi Arabia has a young and growing population: 34.27 million people in 2019, about the same as Poland and Morocco, and expected to peak at 45 million in 2050.
Read the full article here
