Saudi Real Estate Refinance Company Launches First Credit-Rated RMBS Issuance

The Saudi Real Estate Refinance Company (SRC), a Public Investment Fund (PIF) company, has launched its second residential mortgage-backed securities (RMBS) issuance, becoming the first domestic issuance of its kind in Saudi Arabia to receive published credit ratings from Moody’s Ratings and Fitch Ratings.

The development marks a new stage in the Kingdom’s securitisation market, introducing independent credit assessments to an investment asset class established through SRC’s inaugural issuance in August 2025. The latest transaction aims to improve transparency, attract institutional investors and strengthen the connection between residential real estate finance and capital markets.

SAR 420 Million Mortgage Portfolio Backs Issuance

The second issuance is backed by a portfolio of residential mortgage financings valued at approximately SAR 420 million, comprising loans originated by six financing institutions.

Fitch Ratings assigned the securities an AAAsf(sau) rating with a Stable Outlook on its national rating scale, while Moody’s Ratings assigned an Aaa.sa (sf) rating on its national scale. Both ratings represent the highest categories available under the respective agencies’ Saudi national rating scales.

The published ratings provide investors with independent assessments of the securities’ credit characteristics, supporting greater transparency and comparability. They are also expected to help strengthen institutional investor confidence and broaden participation in the domestic securitisation market.

The involvement of six financing institutions adds diversity to the underlying portfolio, supporting SRC’s efforts to establish a sustainable and scalable market for residential mortgage-backed securities.

SRC Seeks to Deepen Saudi Arabia’s Secondary Mortgage Market

The latest issuance builds on SRC’s first RMBS transaction in August 2025, which established a domestic model for securitising residential mortgage financings and connecting mortgage portfolios with capital markets.

The second issuance adds an institutional credit-rating framework to that model, helping investors assess the securities against established credit standards.

H.E. Majed bin Abdullah Al-Hogail, Minister of Municipalities and Housing and Chairman of SRC, said developing the secondary real estate finance market is central to improving the efficiency of the Kingdom’s housing finance ecosystem.

He said the market can broaden sources of long-term liquidity, diversify investment instruments and strengthen links between real estate finance and capital markets.

Al-Hogail added that the latest transaction reflects Saudi Arabia’s progress in developing a more advanced and sustainable real estate finance market supported by diverse financing instruments, clearer credit frameworks and a broader investor base.

He also emphasised that developing the secondary market goes beyond providing liquidity, helping finance providers manage capital more efficiently, establish sustainable funding sources and respond to growing housing needs.

Credit Ratings Aim to Attract Institutional Investors

Majeed bin Fahd Al-Abduljabbar, Chief Executive Officer of SRC, said the second issuance builds on the domestic securitisation model established through the company’s inaugural transaction.

He noted that the addition of independent credit ratings provides greater clarity on the characteristics of the underlying assets and allows the securities to be assessed against established credit standards.

Al-Abduljabbar said the approximately SAR 420 million portfolio, combined with its six originating institutions and the published ratings, supports the continued development of RMBS as an investment asset class suitable for institutional investors.

The issuance also supports SRC’s efforts to provide long-term funding to real estate finance providers, improve liquidity and strengthen capital management efficiency.

By connecting residential mortgage portfolios with capital markets, the company aims to support the sustainability of housing finance while expanding funding options available to lenders.

Supporting Saudi Vision 2030 Housing Objectives

Established by the Public Investment Fund in 2017, SRC operates under a licence from the Saudi Central Bank (SAMA) to facilitate mortgage refinancing and develop the Kingdom’s mortgage finance market.

The company plays a role in advancing the Housing Programme under Saudi Vision 2030, which seeks to increase homeownership among Saudi citizens. SRC supports this objective by providing liquidity to lenders, helping them offer housing finance to individuals.

The latest RMBS issuance forms part of the company’s broader strategy to develop a sustainable securitisation market, expand the investor base and introduce financing instruments that improve long-term liquidity.

The move also supports the integration of Saudi Arabia’s secondary real estate finance market with its wider capital markets, as the Kingdom continues to develop its financial sector and housing ecosystem.