Saudi Arabia is set to tap the dollar bond market for the second time this year, as weaker oil prices edge the kingdom’s budget into a deficit.
The Middle East’s largest economy plans to sell Islamic securities, known as sukuk, maturing in six and 10 years, according to a person familiar with the matter. The initial yield guidance is 110 basis points over US Treasures for the shorter notes and 135 basis points for the longer ones, the person said.
The International Monetary Fund has said Saudi Arabia, which slipped into a fiscal deficit for the first quarter as the economy slowed and spending increased, may post one for the full year too. The fund’s latest projections put the country’s breakeven oil price at almost $81 a barrel, above Brent’s current price of around $74.
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