#SaudiArabia’s Dollar Bond Draws Over $29 Billion of Demand - Bloomberg

Saudi Arabia’s Dollar Bond Draws Over $29 Billion of Demand - Bloomberg

Saudi Arabia is kicking off 2026 with a benchmark-sized dollar bond sale, drawing more than $29 billion of bids as it taps global markets to help fund huge projects aimed at reducing its economic dependence on oil.

The kingdom has set pricing terms on four tranches with maturities ranging from three to 30 years, according to a person familiar with the matter. The strong demand means it can offer a smaller spread over US Treasuries than initially indicated: the level on the three-year bond is set at 65 basis points over the benchmark rate, the five-year at 75 basis points, the 10-year at 85 basis points and the 30-year at 110 basis points.

That’s 30 basis points less than the initial price thoughts for both the three-year note and the longest tranche while pricing was tightened by 25 basis points for the other tenors.

Demand is strongest at the long end, with the 30-year bond attracting more than $8.4 billion of orders, the person said. The 10-year has drawn over $8.2 billion, the five-year more than $6.8 billion and the three-year over $5.7 billion.

Earlier this month, the Ministry of Finance approved borrowing plans that imply about $14 billion to $17 billion of issuance in international bond markets this year. At the upper end, that would be below 2025 levels, while the lower end would mark the smallest amount since 2022.

Still, Saudi Arabia has a history of overshooting its funding targets. Goldman Sachs Group Inc. has predicted the Saudis will issue a record $25 billion of international debt this year, and sees the country’s fiscal deficit being 6% of gross domestic product, far higher than the government’s target of 3.3%.

Saudi Arabia’s Ministry of Finance closed a $13 billion dollar loan late last year. The proceeds will be used for infrastructure projects and the facility carries a seven-year tenor. The loan was heavily marketed to Chinese banks, according to people familiar with the matter.

The loan deal was the latest in a series of transactions that have seen Saudi Arabia tap the Asian market for liquidity to diversify its funding sources. Asian banks are keen to lend amid a shortage of transactions at home. Loan volumes in Asia, excluding Japan, in dollars, euros and yen fell to a five-year low in 2025, according to data compiled by Bloomberg.