Wednesday 11, April 2018 by Jessica Combes

Saudi Arabia raises $11 billion in biggest EM bond of 2018

 

Saudi Arabia has raised $11 billion in the biggest dollar sale by an emerging-market sovereign this year.

Abreakdown of what Saudi Arabia sold, according to Bloomberg: $4.5 billion worth of bonds due in 2025 at 140 basis points over similar-maturity U.S. Treasuries; $3 billion of notes maturing in 2030 at a spread of 175 basis points; and $3.5 billion of 2049 bonds at 210 basis points over the similar benchmark.

Saudi Arabia’s sale received more than $50 billion in bids, including interest from joint lead managers, exceeding Argentina’s $9 billion offering in January.

The Kingdom has been one of the biggest issuers in emerging markets since the plunge in oil prices prompted the kingdom to sell dollar bonds and with this week’s offering, Saudi Arabia has raised a total of $50 billion since the end of 2016, according to data compiled by Bloomberg.

The sale was completed as Crown Prince Mohammed bin Salman visited officials in France after a three-week tour of the U.S. to drum up business. His trip, as well as Brent crude prices of about $70 a barrel, has helped investors move on from the shock of a corruption crackdown that led to the arrest of high profile princes and billionaires in November.

According to Bloomberg, Saudi Arabia intends to borrow the equivalent of $31 billion this year to bridge an expected budget deficit of $52 billion and fund growth plans after its economy shrank last year. Last month, it increased a $10 billion syndicated loan by $6 billion.

 

  

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