Saudi Arabia raises $11bn in biggest EM bond sale of 2018

Saudi Arabia has been one of the biggest issuers in emerging markets since a plunge in oil prices
By Bloomberg
Wed 11 Apr 2018 10:14 AM

Saudi Arabia beat estranged neighbour Qatar to the bond market, raising $11 billion in the biggest dollar sale by an emerging market sovereign this year.

The government sold $4.5 billion worth of bonds due in 2025 at 140 basis points over similar-maturity US Treasuries, $3 billion of notes maturing in 2030 at 175 basis points over the similar benchmark and $3.5 billion of 2049 bonds at 210 basis points. Argentina raised $9 billion in a three-tranche offering in January.

Saudi Arabia moved quickly to sell the bonds without a roadshow, while Qatar, which is being boycotted by the kingdom and other Gulf states, is meeting investors in the US and UK this week ahead of a possible sale. The kingdom also raised the funds as Crown Prince Mohammed bin Salman visits France after a three-week tour of the US

“Saudi has re-gained the market’s confidence,” Shahzad Hasan, an emerging-market debt manager at Allianz Global Investors, which has $612 billion under management, said ahead of the sale.

“The resilience in oil is playing an important role in that and the crown prince’s tour of the western economies was a positive factor as it sent the right message to foreign investors.”

Biggest issuer

Saudi Arabia has been one of the biggest issuers in emerging markets since a plunge in oil prices prompted the kingdom to sell dollar bonds less than two years ago. It raised $21.5 billion in 2017 and $17.5 billion in 2016, according to data compiled by Bloomberg.

The nation plans to borrow the equivalent of $31 billion this year to bridge an expected budget deficit of $52 billion and fund growth plans after its economy shrank last year. Last month, it increased a $10 billion syndicated loan by $6 billion.

Citigroup Inc., GIB Capital, Goldman Sachs Group Inc., HSBC Holdings Plc and Morgan Stanley were joint global coordinators on the deal. Bank of China, Industrial & Commercial Bank of China Ltd., JPMorgan Chase & Co. and Mitsubishi UFJ Financial Group were joint leader managers.

For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Last Updated: Wed 11 Apr 2018 10:49 AM GST

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.