• Saudi Arabia receives $ 40 billion requests for its international bonds


    Saudi Arabia has received $ 40 billion in international bond issues as it plans to issue three tranche international bonds worth $ 12.5 billion.
    The bonds are divided into three segments maturing in March 2023, March 2028, and October 2047, and the initial price trend of the three tranches at 130 basis points above the US Treasuries for the five-year bond tranche, 165 points Basis for 10 year bonds and 200 basis points for 30 year bonds, Reuters reported.
    The Ministry of Finance has announced the assignment of a number of investment banks to manage and arrange the issuance of debt instruments included in the International Program for the issuance of debt instruments established by the Government of Saudi Arabia on 10 October 2016, referring to the update of the International Program on 22 September 2017.
    "It intends to offer debt instruments denominated in US dollars and an unsecured priority, consistent with the provisions of Rule 144a (144A) and Reg S of the Securities Act of 1933 and its amendments.
    Goldman Sachs International, GIB Capital, HSBC, JPMorgan and Mitsubishi UFJ were appointed to arrange the issue.
    On October 20, 2016, the first international bond issue denominated in US dollars was priced and allocated under the newly created International Public Debt Issuing Program. The total for the first round was US $ 17.5 billion (65.6 billion), and the total number of applications for these bonds amounted to 67 billion dollars (251.3 billion riyals).
    It is expected that the issuance of international bonds denominated in dollars, will reduce pressure on domestic liquidity, and reflected positively on the Saudi banking sector.
    The Saudi government has been successful in securing financing from international and local markets during 2016 and 2017, supported by local and international investors who reflect their confidence in the Kingdom's economy. International bonds and bonds have been covered four times and three local bonds have been covered more than three times. The Saudi government has secured 174 billion riyals, equivalent to 46.5 billion dollars from international and local markets in 11 months (from November 2016 to September 2017).
    This funding is distributed between 136.9 billion riyals ($ 36.5 billion) from international markets (79 percent of the total), while 37 billion riyals ($ 9.9 billion) is from the local market (21 percent of the total).
    Saudi riyals increased to SR 378.4 billion, equivalent to US $ 100.9 billion, compared to SR 341.4 billion (US $ 91 billion) ) By the end of the first half of this year.
    This debt is equivalent to 14.7 percent of GDP at constant prices of 2.58 trillion in 2016, while it is equivalent to 15.8 per cent of current-rate output of 2.4 trillion riyals.

© All Rights Reserved for Asharqia Chamber