Saudi Arabia's debut Islamic bond sale gets $17.5bn orders

Saudi Arabia has been hit by a drop in oil prices, prompting the kingdom to cut spending, raise debt

Saudi Arabian Oil Co last week sold $3 billion in bonds, which followed the government’s debut conventional offering in October that raised $17.5 billion in the biggest-ever emerging-market sale.

Saudi Arabian Oil Co last week sold $3 billion in bonds, which followed the government’s debut conventional offering in October that raised $17.5 billion in the biggest-ever emerging-market sale.

Saudi Arabia’s debut dollar-denominated Islamic bond, which is due to price Wednesday, attracted more than $17.5 billion of investor orders as of Tuesday evening, people familiar with the matter said.

The government plans to sell the five-year sukuk in the 115 basis points area over mid-swaps and a 10-year tranche at a spread of about 155 basis points, the people said, asking not to be identified because the information is private. Books for sale opened to investors on Tuesday.

Saudi Arabia has been hit by a drop in oil prices, prompting the kingdom to cut spending, raise debt and prepare what may be the world’s largest initial public offering of state-owned oil company Saudi Arabian Oil Co. The company last week sold $3 billion in bonds, which followed the government’s debut conventional offering in October that raised $17.5 billion in the biggest-ever emerging-market sale.

Citigroup Inc., HSBC Holdings Plc and JPMorgan Chase & Co. are joint global coordinators for the sukuk, while BNP Paribas SA, Deutsche Bank AG and NCB Capital are helping to manage the sale.

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