The Gulf monarchy sold the sukuk securities maturing in October 2029 at 127 basis points more than the benchmark midswap rate, down from an anticipated range of between 145 and 150 basis points, as it received more than US$13 billion of orders.

The sale reflects how demand for Saudi Arabia’s Islamic bonds has remained buoyant even as its conventional dollar debt has underperformed that of peers this month.

Last month’s strikes on Saudi Aramco facilities laid bare the vulnerability of the kingdom’s lifeblood industry, prompting Fitch Ratings to downgrade the debt.

The boost from the kingdom’s inclusion in JPMorgan Chase & Co’s emerging-market dollar-bond indexes earlier this year has also faded.

“The main appeal of the offering was overall pent up demand for sukuk,” said Abdul Kadir Hussain, head of fixed-income asset management at Dubai-based Arqaam Capital.

“The deal was priced very tight to the existing curve.”

The issuance took the amount of sukuk sold by governments and companies in the Gulf to US$17.2 billion this year. They raised US$17.7 billion of the securities in all of 2018.