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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 Qatar Stock Exchange on Sunday snapped four consecutive days of bullish run to witness its key index settle at sub-9,000 levels and capitalisation retreat below QR500bn.
The MSM30 ended on a flat note to close at 4566.98 points, up by 0.06 per cent. MSM Sharia index closed at 651.16 points, declined by 0.45 per cent. HSBC bank Oman was the most active in terms of vol
Times of Oman
Heavyweights like Emaar Properties and Dubai Islamic Bank weighed on the Dubai index on Sunday, after a strong weekly performance on the back of new rules from the government on visa and ownership ru
The Dubai Financial Market General Index (DFMGI) was up 22.87 or 0.79 per cent last week to end at 2,954.46. There were 27 advancing issues and 10 declining, while volume reached a 16-week high.
As expected, the domestic financial market witnessed calm activities in the first week of the holy month. Further, the rapid developments in the other Gulf markets in terms of the results and announc
Oman Daily Observer