The lion’s share of the investment requirement—approximately 90 per cent—is anticipated to stem from companies that are outright or partly owned by the state. These firms enjoy easier access to bank and capital-market funding, providing a favourable backdrop for borrowing.
Non-financing corporates in the Kingdom have already tapped the foreign-currency debt market to the tune of about US$78.6 billion since 2017 and up to mid-October 2025, with the national oil champion Saudi Aramco accounting for roughly US$43 billion or more than half of the issuance.
S&P Global notes that the shift reflects a strategic diversification of funding by major Saudi corporates, extending maturities while reaching out to global investors. The agency added that although this trend offers credit support, it will monitor whether the accumulation of debt outpaces earnings growth.
Domestic banks are expected to remain crucial lenders but will increasingly lean on external debt to meet the capex demands. The report signals that Saudi banks may be called upon to provide US$65-75 billion in new corporate loans for 2025-26.
Higher capital-spending needs are linked with the government’s economic-diversification programme, commonly referenced as Vision 2030, which is boosting investment across utilities, construction, materials and telecommunications sectors. This shift is viewed as supportive of corporate profitability and creditworthiness, even as debt levels rise.
At the same time, S&P emphasises that refinancing risks remain manageable for rated entities. Much of the debt maturing in 2025 is concentrated in state-owned listed firms, which benefit from deeper capital-market access and often enjoy sovereign-linked guarantees.
Nevertheless, concerns around rising leverage persist. The corporate credit expansion between 2020 and 2024 saw private-sector credit climb by 60 per cent, although credit to listed firms rose more modestly at 10-12 per cent. This divergence is attributed to the more dynamic growth and higher funding needs of smaller or unrated companies.
The push for cross-border issuance marks a notable evolution in the Kingdom’s corporate-funding landscape. Despite past reliance on domestic bank financing, the necessity of tapping international capital has grown as companies seek longer maturities and greater diversification. The foreign-currency issuance by non-financial corporates being 91 per cent driven by state-owned enterprises reflects that shift.
Credit-market observers underline that the ramp-up in borrowing aligns with broader shifts in the region’s fixed-income markets. As conventional debt and sukuk markets evolve, Saudi firms are positioning themselves for global investment flows—a trend that both enhances funding flexibility and elevates scrutiny around credit terms.
The elevated capex requirement and financing surge arrive amid a backdrop of geopolitical and oil-market uncertainties. Yet, analysts at S&P conclude that the overall credit quality of rated Saudi corporates is likely to remain stable, supported by non-oil-economic expansion, cost rationalisation and significant sovereign-reserve buffers.
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Saudi Arabia