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Tue 19 Sep 2017 09:37 AM

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Saudi Arabia raises $1.9 billion from three-part sukuk offering

Kingdom has raised $10bn the past three months from domestic debt sales

Saudi Arabia raises $1.9 billion from three-part sukuk offering

Saudi Arabia raised 7 billion riyals ($1.9 billion) from domestic sukuk sales as the kingdom seeks to bolster finances amid an economic overhaul and lower oil prices.

The government received more than 24 billion riyals in bids for its third riyal-denominated Islamic bond sale, according to a statement on the Ministry of Finance’s website. It raised 2.4 billion riyals from a five-year tranche, 3.9 billion riyals from seven-year notes and 700 million riyals through a 10-year tranche.

The kingdom has raised $10bn (39bn riyals) in the past three months from domestic debt sales after tapping the international Islamic bond markets for $9 billion. The fund-raising could help the government narrow an expected budget deficit of $52.7bn (198bn riyals) this year, or 7.7 percent of economic output.

Saudi Arabia is implementing a transformation plan aimed at weaning the economy off oil. As part of these efforts, the government plans to create the world’s largest sovereign fund and sell hundreds of state assets, including Saudi Aramco. as well as stakes in the stock exchange, football clubs and flour mills.

The Public Investment Fund, the kingdom’s wealth fund, will next month host chief executive officers of companies such as BlackRock, HSBC Holdings and SoftBank Group at an event to showcase its "redefined investment mandate and strategy."