Friday 21 October 2016

Saudi Arabia’s $17.5bn bond sale has lessons for debt market

Saudi Arabia’s $17.5bn bond sale has lessons for debt market:

"Saudi Arabia’s ambitious plan to chart a course away from oil dependence and towards a more diversified economy is off to a flying start — with a blockbuster $17.5bn debut sovereign bond sale.

Investors shrugged off concerns about the prospect of the sustained oil slump translating into years of anaemic growth, aggravating social concerns and a backdrop of regional tensions.

The lure of investing in a large economy with little debt that has never before issued a dollar-denominated bond, piqued global interest. Investor orders reached $67bn, enabling Saudi Arabia to borrow more — and more cheaply — than initially suggested."



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Oil producers optimistic that the slump is over

Oil producers optimistic that the slump is over:

"As several of the world’s top oil executives rolled up at a Mayfair hotel in London this week for an industry summit, Brent crude, their benchmark product, was trading at $52 per barrel — exactly same the level as a year ago.

This might not seem like a cause for celebration. But, after the brutal retrenchment since prices collapsed from above $100 per barrel in mid-2014, the near 12-month highs of recent days have added to confidence that the worst is over for oil producers.

“We are at the end of a considerable downturn,” said Khalid al-Falih, Saudi Arabia’s energy minister and chairman of Saudi Aramco, the state-controlled oil company, at the annual Oil & Money conference. “The fundamentals are improving and the market is rebalancing.”"



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