SRC launches second mortgage-backed securities transaction

Logo of Saudi Real Estate Refinance Co. (SRC)

The Saudi Real Estate Refinance Co. (SRC), a PIF-owned subsidiary, announced the launch of the Kingdom's second residential mortgage-backed securities (RMBS), the first domestic issuance of its kind to receive publicly disclosed credit ratings from Moody’s and Fitch.

The second issuance is backed by a residential mortgage portfolio worth nearly SAR 420 million, originated by six financing entities.

The securities were assigned a AAAsf (sau) rating on its national scale by Fitch, with a stable outlook, while Moody’s assigned them an Aaa.sa (sf) rating on its national scale. Both ratings represent the highest rating category on the respective agencies’ national scales.

These ratings provide an independent credit assessment of the securities, enhancing issuance transparency and the comparability of their credit characteristics. They also support institutional investor confidence in this asset class and help broaden participation in Saudi Arabia’s domestic securitization market.

Majid Al-Hogail, Minister of Municipalities and Housing, and Chairman of SRC, said that developing the secondary mortgage market bolsters the efficiency of the housing finance system by expanding long-term liquidity sources, diversifying investment instruments, and strengthening the links between mortgage finance and capital markets.

Developing this market enables financing entities to manage their capital more efficiently, supports the sustainability of funding sources, and enhances the sector’s ability to meet growing housing needs, he added.

SRC CEO Majeed Al-Abduljabbar commented that diversifying the sources of assets in the portfolio, alongside independent credit ratings, would help develop this class of securities and enhance its appeal to institutional investors.

He explained that the issuance supports the provision of long-term funding sources for mortgage finance providers, strengthens their available liquidity, and improves capital management efficiency, thereby contributing to the sustainability of residential mortgage finance and the development of the Kingdom’s secondary market.

The issuance builds on SRC’s first RMBS issuance, launched in August 2025, which helped establish a domestic model for securitizing residential mortgage financing and linking financing portfolios to capital markets.