Saudi Arabia Joins Middle East Bond Binge to Boost Finances - Bloomberg:
Saudi Arabia sold $7 billion of bonds on Wednesday as it followed other Middle Eastern states that have issued foreign debt to bolster their finances in the face of the coronavirus pandemic and plunging energy prices.
The offering marked the second time this year the world’s largest oil exporter has turned to international capital markets, as Crown Prince Mohammed bin Salman pushes ahead with plans to open up the economy and wean it off crude. In December, the government sold a $29 billion stake in energy giant Saudi Aramco through the largest initial public offering in history.
“It doesn’t have a choice but to borrow from the bond market,” said Richard Segal, a senior analyst at Manulife Investment in London. “With oil prices lower and soon production lower, and an economic support package recently in place, the government’s deficit and financing requirements have jumped.”
The deal was heavily oversubscribed, with investors placing around $54 billion of orders, according to a person familiar with the matter. The kingdom sold $2.5 billion of bonds maturing in 5.5 years, $1.5 billion of debt due in 10.5 years and $3 billion of 40-year notes.
Saudi Arabia sold $7 billion of bonds on Wednesday as it followed other Middle Eastern states that have issued foreign debt to bolster their finances in the face of the coronavirus pandemic and plunging energy prices.
The offering marked the second time this year the world’s largest oil exporter has turned to international capital markets, as Crown Prince Mohammed bin Salman pushes ahead with plans to open up the economy and wean it off crude. In December, the government sold a $29 billion stake in energy giant Saudi Aramco through the largest initial public offering in history.
“It doesn’t have a choice but to borrow from the bond market,” said Richard Segal, a senior analyst at Manulife Investment in London. “With oil prices lower and soon production lower, and an economic support package recently in place, the government’s deficit and financing requirements have jumped.”
The deal was heavily oversubscribed, with investors placing around $54 billion of orders, according to a person familiar with the matter. The kingdom sold $2.5 billion of bonds maturing in 5.5 years, $1.5 billion of debt due in 10.5 years and $3 billion of 40-year notes.
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