Saudi Telecom Company (STC), the Kingdom’s largest telecommunications provider, has successfully completed a USD 2.0 billion dual-tranche sukuk issuance, attracting substantial international investor demand and marking a significant moment for Shariah-compliant capital markets, the Islamic Corporation for the Development of the Private Sector (ICD).
The transaction, which represents STC’s first return to the international sukuk market since 2019, achieved a more than four-times oversubscription, with total orders exceeding USD 8 billion from over 300 global investors.
ICD served as a Joint Lead Manager on the landmark deal, its first such collaboration with STC, underscoring the growing depth and maturity of Islamic finance in the Middle East.
The dual-tranche issuance consisted of a five-year tranche and a ten-year tranche. The shorter-term portion was finalized at a spread of 75 basis points over US Treasury yields, while the longer-term tranche was set at 90 basis points over US Treasury rates, reflecting robust investor confidence in STC’s credit profile and strategic vision.
Sukuk, Islamic financial certificates similar to bonds but compliant with Shariah principles, have been increasingly used by corporations and governments across the Gulf Cooperation Council to tap global liquidity and diversify funding sources.
In STC’s case, the proceeds are intended to support long-term strategic initiatives including expansion of digital infrastructure, enhancement of connectivity services, and broader contributions to Saudi Arabia’s economic transformation under Vision 2030.
The Kingdom’s Vision 2030 framework aims to reduce oil dependence and expand private sector participation in high-growth sectors including technology, telecommunications and digital services, sectors where STC plays a leading role.
Commenting on the transaction, ICD highlighted that the pricing and broad investor participation reflect strong global interest not only in STC but in quality Shariah-compliant investment products generally.
The deal also underscores the strategic role multilateral development banks play in facilitating private sector access to international capital markets.
ICD, the private sector arm of the Islamic Development Bank Group, has actively supported Islamic financing markets for more than two decades.
Its participation in STC’s sukuk issuance aligns with its mission to foster economic development across member countries through private sector expansion and innovative financing solutions.
“The successful completion of this sukuk issuance… underscores the robust global appetite for high-quality Shariah-compliant investment opportunities in strategic sectors,” ICD said in a statement, noting that its involvement affirms commitment to equity, inclusion and broadening participation in global financing.
ICD has been associated with a growing portfolio of Islamic capital market transactions in the Gulf and beyond.
Recent deals include its joint lead manager role in Sharjah Islamic Bank’s USD 500 million sukuk issuance and its own five-year USD 500 million sukuk listing on Nasdaq Dubai in late 2025, both of which drew strong international investor demand.
The robust oversubscription of STC’s sukuk issuance comes amid heightened investor interest in Gulf issuances, driven by attractive yield spreads, credit quality, and geopolitical stability relative to other emerging market offerings.
The broader sukuk market has seen significant growth in recent years, with sovereigns, state-linked entities and corporates increasingly turning to Islamic finance to diversify debt portfolios.
Experts say STC’s successful return to the market reinforces the role of Saudi Arabia’s telecommunications and technology sectors as drivers of economic diversification.
STC, which provides a comprehensive range of mobile, internet, fixed-line and digital services, continues to expand its footprint both domestically and across the Middle East, bolstering its profile among global fixed-income investors.
The strategic alignment of STC’s capital markets activity with broader national economic goals further enhances the Kingdom’s attractiveness as a destination for both conventional and Islamic finance.
Investors’ confidence in the dual-tranche sukuk issuance highlights a broader trend: global appetite for sustainable, Shariah-compliant financing instruments remains strong, particularly when backed by robust corporate fundamentals and a clear growth strategy.
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