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Riyadh, Saudi Arabia
Saudi Real Estate Refinancing Company (SRC), a Saudi Public Investment Fund (PIF) company, has announced the launch of the second issue of residential real estate finance-supported securities (RMBS), in a qualitative step to develop the Kingdom’s securitization market, as the first local issue of this category to receive announced credit ratings from Moody’s and Fitch’s credit rating agencies.
The issuance represents a development in the construction of the secondary market for real estate financing in the Kingdom, through the transition from the establishment of a new category of investment assets to enhance its credit structure, and provide an independent assessment of its risks, in order to support transparency, expand the participation of institutional investors, and enhance the integration of the real estate finance system with the capital markets.
This development is an extension of the first issue launched by the company in August 2025, which contributed to the establishment of a local model to securitize residential real estate financing, and link financing portfolios to the financial markets. The new issuance adds an institutional credit dimension to this model, supporting the construction of a sustainable market for expandable issuances, and providing a base for the development of this category of investment assets in the Kingdom, according to the Saudi Press Agency (SPA).
For his part, Minister of Municipalities and Housing and Chairman of the Board of Directors of the Saudi Real Estate Refinancing Company, Majid bin Abdullah Al-Huqail, said that the development of the secondary market for real estate financing is a key pillar to enhance the efficiency of the housing finance system, by expanding the sources of long-term liquidity, diversifying investment tools, and enhancing the linkage of mortgage financing to the capital markets.
Al-Huqail: Developing the secondary market for mortgage financing is a key pillar to enhance the efficiency of the housing finance system
He added: “This issuance is an extension of efforts to build a more advanced and sustainable real estate financing market, based on the diversity of financing instruments, the clarity of credit frameworks, and the expansion of the investor base, and reflects the ability of the financial system in the Kingdom to develop new investment tools that support the growth of the residential sector, enhance the efficiency of capital employment, and open wider horizons for institutional investment.”
He pointed out that the development of the secondary market for real estate financing goes beyond providing liquidity to build a more integrated system, which allows financing entities to manage their capital efficiently, support the sustainability of funding sources, and enhance the sector’s ability to meet the growing housing needs, stressing the continuation of work to consolidate the elements of this market, and expand its growth opportunities, in line with the development of the Saudi financial market, and support the objectives of Saudi Vision 2030.
The second issue is based on a portfolio of residential real estate financing worth about SAR 420 million, established by six financing entities, and securities have obtained a credit rating AAAsf (sau) on the national scale from Fitch, with a stable outlook, while Moody’s has granted it a rating (sf) Aaa. sa on the national scale, and the two ratings represent the highest rating on the national scale of both agencies, and these ratings provide an independent credit rating of securities, which enhances the transparency of the issuance and the ability to compare its credit characteristics, and supports the confidence of institutional investors in this asset class, and contributes to expanding the base of participants in the local securitization market.
The value of the residential real estate financing portfolio is SAR 420 million and consists of financing provided by 6 entities
On the other hand, the CEO of the Saudi Real Estate Refinancing Company, Majid bin Fahad Al-Abdul-Jabbar, said: “The second issue builds on the establishment of the first version of a local model to securitize residential real estate financing, and adds to it independent credit ratings that enhance the clarity of asset characteristics, and allow their evaluation according to approved credit criteria,” pointing out that the value of the portfolio of residential real estate financing is about 420 million riyals, and consists of financing provided by six financing bodies, and the diversity of asset sources, along with credit ratings, contribute to the development of this category of securities, and enhance its ability to institutional investment.
He said that the issuance supports the company’s efforts in providing long-term financing sources to its mortgage finance entities, enhancing the liquidity available to them, and raising the efficiency of capital management, which helps to support the sustainability of residential real estate financing, and the development of the secondary market in the Kingdom. The issuance comes within the strategy of the Saudi Real Estate Refinancing Company to build a sustainable market for securities supported by residential real estate financing, expand the investor base, develop financing tools that contribute to enhancing long-term liquidity, and support the integration of the secondary market for real estate financing with the Saudi capital markets.
It is worth mentioning that the Public Investment Fund established the Saudi Real Estate Refinancing Company in 2017, after obtaining a license from the Saudi Central Bank, with the aim of developing the secondary market for mortgage financing in the Kingdom. The company is working to provide liquidity to the financing bodies and enable them to provide various housing financing solutions for individuals, in order to support the sustainability of the mortgage system and contribute to achieving the objectives of the housing program within the Saudi Vision 2030.
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