Sight of Saudi Bailout Bazooka Enough for Record Bond Rally - Bloomberg:
When Saudi Arabia vows to go “all the way” for a country in need, the rest is just noise for investors.
A day after Lebanon’s bonds sank following a credit rating downgrade by Moody’s Investors Service, a show of support by Saudi Arabia was enough to undo the damage. With the kingdom’s regional rival Qatar also agreeing to throw a $500 million lifeline to Lebanon earlier this week, its dollar bonds due 2028 jumped the most ever on Wednesday, despite the Saudi finance minister skimping on details in a pledge made on CNBC.
Even if Saudi Arabia is all talk for now, investors know the kingdom can easily back it up with action. Bahrain’s battered bonds recovered to become the best performer in the Persian Gulf last year after Saudi Arabia and other wealthy allies came to the rescue in October with a $10 billion package.
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