Riyadh, Saudi Arabia. For illustrative purposes only. Image Credit: Agency

Dubai: Saudi Real Estate Refinance Co (SRC), modelled on US mortgage finance firm Fannie Mae, said on Tuesday it will obtain from the Ministry of Finance sovereign guarantees on its planned issues of sukuk, or Islamic bonds.

SRC, a subsidiary of Saudi Arabia’s sovereign Public Investment Fund, plans to issue 4 billion riyals ($1.07 billion) in sukuk this year, the firm’s chief executive told Reuters last month.

The bond issuance comes amid plans to purchase more home loan portfolios from mortgage financing companies and banks to boost the kingdom’s secondary mortgage market.

In March, SRC completed a 750 million riyal sukuk issue with multiple tenors, under a programme that allows it to issue up to 11 billion riyals of local currency denominated Islamic bonds.