March 14, 2018 / 9:32 AM / a year ago

Saudi Arabia’s home finance co Bidaya announces debut sukuk programme

RIYADH, March 14 (Reuters) - Saudi Arabia’s Bidaya Home Finance (BHF), partly owned by the Saudi sovereign wealth fund Public Investment Fund, has established a 500 million riyals ($133.33 million) inaugural sukuk programme, it said on Wednesday.

The Riyadh-based company aims to make home financing more readily available by offering sharia-compliant financing products to Saudi retail customers in a country with low levels of home ownership.

Saudi Arabia’s housing ministry said on Wednesday that it has raised the target for the local mortgage market to reach a total volume of 502 billion riyals by 2020 from a current 290 billion riyals, as the country implements various measures to stimulate mortgage lending and home purchases.

The Saudi government aims to raise the household ownership ratio to 70 percent by 2030, which means 1.2 million additional housing units.

BHF has hired Ashmore Investment Saudi Arabia to arrange the programme while Albilad Capital has been hired as “dealer.”

The sukuk programme is “a core component of the company’s medium term financing strategy,” said Mazin Al Ghunaim, BHF’s chief executive. “Additionally, as per the Saudi Vision 2030, we are especially excited about playing a material role in the development of the domestic capital markets and enabling homeownership for all.”

BHF obtained a license from the Saudi Arabian Monetary Agency (SAMA) in 2015.

In addition to the PIF, Bidaya’s major shareholders include the Jeddah-based Islamic Corp for Development of the Private Sector, part of the Islamic Development Bank. ($1 = 3.7501 riyals) (Reporting by Marwa Rashad, writing by Davide Barbuscia; Editing by Saeed Azhar)

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