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Tue 18 Oct 2016 09:11 AM

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Saudi Arabia to launch bumper bond sale on Wednesday – report

Landmark sale to get green light tomorrow; bankers expect up to $15 billion in Middle East’s largest international debt sale

Saudi Arabia to launch bumper bond sale on Wednesday – report
(Fayez Nureldine/AFP/Getty Images)

Saudi Arabia is set to launch its long-awaited first international bond sale on Wednesday after a roadshow in the US and UK concludes on Tuesday.

The Financial Times reported that bankers connected to the sale had said that initial price guidance for the bond, believed to be between $10 billion and $15 billion, would be released tomorrow.

The bond sale would be the largest international debt issuance in the Middle East and comes as the kingdom attempts to tackle a substantial budget deficit accrued as a result of the low oil price.

The newspaper said that strong demand was expected for the debut bond, quoting one banker as saying: “All going well, they should print later in the week”.

It said investors who had met Saudi delegates expected to the bonds to be issued with a yield between 160 and 200 basis points over equivalent US government benchmarks.

The bonds are likely to be split into five, 10 and 30-year maturities.

Qatar issued $3.5 billion of five-year bonds in May at 120 basis points over US Treasuries, $3.5 billion of 10-year at 150 bps and $2 billion of 30-year at 210 bps.

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