Al Rajhi Bank Opens Dollar-Denominated Social Tier 2 Sukuk Sale

Al Rajhi Bank has begun marketing a dollar-denominated sukuk issuance structured as social Tier 2 instruments, according to a report by Argaam.

The move marks the Saudi lender’s latest foray into international debt markets, tapping investor demand for Shariah-compliant instruments tied to social outcomes. Argaam, which covers the Saudi stock market, reported the development on Thursday without disclosing the target size or expected pricing terms.

The issuance comes amid a broader wave of debt activity across Saudi Arabia. In a separate report, Asharq Bloomberg noted that the Kingdom recently raised $3.25 billion from international sukuk sales, successfully navigating a global market sell-off. Al Riyadh newspaper similarly highlighted the government’s push to diversify funding sources through that same $3.25 billion raise.

Fitch Ratings has commented on Saudi Arabia’s growing debt market sophistication, saying the country has developed advanced debt markets with clear strategies, according to Okaz. Meanwhile, Asharq Al-Awsat reported that the Saudi debt market is expanding, with the government, banks, and corporations all competing for financing.

al rajhi bank

For Al Rajhi Bank, the social Tier 2 sukuk would count toward regulatory capital while funding projects or assets with social benefits, a structure that has gained traction among Gulf banks seeking to align funding with ESG goals.

The bank has not yet confirmed the final size, pricing, or expected closing date for the offering. Market participants will likely watch for book-building results in the coming days to gauge appetite for Saudi bank paper amid volatile global conditions.