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Saudi Arabia has hired banks to arrange a global investor call ahead of a potential international bond issuance, as the Gulf’s largest economy, and the world’s top oil exporter, tries to plug a budget deficit caused by lower oil prices.
Saudi Arabia could issue up to $10 billion, banking sources said, in what would be its third international bond sale after a $17.5 billion debut international bond last year — the largest ever sold across emerging markets — and a $9 billion sukuk, or Islamic bond, issued in April.
In addition to the international debt markets, the Saudi government has recently raised debt financing from local investors through three monthly domestic sukuk sales started in July, which totalled 37 billion riyals ($9.9 billion).
The fund-raising exercises are needed to cover a large budget deficit projected at 200 billion riyals for 2017.
The new international bond, a 144A/Regulation S senior unsecured transaction, could be issued as soon as this week, sources said. It is split into three tranches: a long-five year tranche, a long-10 year one and a 30-year tranche, a document issued by one of the banks leading the deal showed on Monday.
Goldman Sachs International, GIB Capital, HSBC, J.P. Morgan and MUFG have been appointed as joint lead managers and joint bookrunners.
In the presentation documents that the government made available to fixed income investors, and reviewed by Reuters, Saudi Arabia, rated A1 by Moody’s and A+ by Fitch, said its economic fundamentals are “superior to those of its rating peers or other G20 members.” The government also boasts its “ample borrowing capacity” and “low external leverage” given that general government debt was only 13.1 per cent of GDP in 2016, while its gross sovereign external debt amounted to 4.3 per cent in 2016, the document showed.
The upcoming Saudi bond is expected to attract huge demand from global investors looking for long-term, high-yielding paper in a market still marked by low global interest rates. In its debut international issuance last year, demand for the Saudi bond was almost four times the $17.5 billion amount of the debt sale.
The MSM30 index ended lower on Monday and closed at 4,381.92 points, down by 0.55 per cent. MSM Sharia Index closed at 605.47 points, down by 0.07 per cent. Bank Nizwa was the most active in terms of
Times of Oman
The contagion impact from the crisis in Turkey was being felt in Dubai, along with other emerging markets.
The impact was felt largely through Emirates NBD, which recently entered an agreem
Qatar stocks led losses across the Gulf on Sunday as the Turkish currency crisis unsettled investors. Every regional index ended the day in negative territory. The Doha measure declined by 2.6 perce
The MSM30 index ended lower on Sunday and closed at 4,406.35 points, down by 0.56 per cent. MSM Sharia Index closed at 605.87 points, down by 0.31 per cent. Al Anwar Holding was the most active in te
Times of Oman
The Dubai index fell more than 1 per cent on Sunday, its sharpest fall since July 2, as shares like Emirates NBD and DAMAC Properties weighed on sentiment.
The Dubai Financial Market Genera