SRC Prices $112M Domestic RMBS With First Published Ratings in Saudi Arabia

Saudi Real Estate Refinance Company has launched its second domestic residential mortgage-backed securities transaction, backed by a portfolio of about $112 million, or SAR 420 million. The company is owned by the Public Investment Fund. Its latest deal is the first issuance of this kind inside the kingdom to carry published credit ratings from both Moody's Ratings and Fitch Ratings.

Announced on October 12, the transaction pools residential mortgage financing originated by six lenders. It marks another step in the kingdom's effort to build a secondary mortgage market, widen the funding sources available to housing finance, and draw in institutional investors.

Turning loan books into securities

Under the structure, mortgage lenders can convert existing residential financing portfolios into investable securities. That opens access to capital-market funding and can free up liquidity for additional housing loans. Securitization also lets a lender recycle capital instead of holding loans on its books until maturity.

The independent ratings are expected to make the transaction easier for investors to assess, improving transparency and confidence in a market that is still forming, and supporting broader institutional participation.

Majeed Al-Abduljabbar, SRC's chief executive, said spreading mortgage assets across six originating lenders, alongside the independent credit ratings, would help build a securitization market capable of scaling up.

The issuance also serves housing objectives under Saudi Vision 2030 by strengthening long-term financing sources and widening the links between mortgage lenders and capital-market investors.

Regulatory approval and ratings work

The deal follows approval from the Saudi Central Bank in August 2025, which allowed SRC to bring residential mortgage-backed securities to the domestic market as part of efforts to strengthen financing capacity, diversify funding sources and expand the investor base.

Fitch Ratings assessed the transaction in September 2026 under the name Sukuk Saudi Real Estate Refinance Company RMBS-2. The expected rating on the senior sukuk was supported by 8% credit enhancement, a buffer designed to absorb certain losses before they reach senior investors. Moody's Ratings then published a definitive rating action on October 12, after an earlier provisional assessment.

No earlier domestic transaction of this type has carried published ratings from the two agencies. Together they give an independent read on the credit risk in the deal and set a reference point for future domestic mortgage-backed issues.

International borrowing

SRC has also used international debt markets to expand its mortgage refinancing capacity. In February 2025 it priced a $2 billion government-guaranteed international sukuk in three- and 10-year tranches, issued under a $5 billion programme listed on the London Stock Exchange. The offering was six times oversubscribed and attracted demand from more than 300 institutional investors.

What to watch

Whether a durable domestic securitization market takes hold depends on repeat issuance, participation from a wider set of institutional investors, and sufficient secondary-market liquidity to support trading. The size of future transactions and the demand they attract will be the clearest indicators of how far the market has moved.