DUBAI: Saudi Arabia is tapping global debt markets with a planned three-part bond sale on Monday, fixed income news service IFR reported, with proceeds expected to help cover its budget deficit and pay down debt.
The indicative price for the 3-year tranche was set at 120 basis points (bps) over U.S. Treasuries (UST), while the 6-year and 10-year portions have initial guidance of 130 bps and 140 bps, respectively, over the same benchmark, IFR said.
All three tranches are expected to be benchmark-sized, typically understood to mean at least $500 million.
Saudi Arabia, the world’s top oil exporter, has forecast a fiscal deficit of $27 billion for 2025 as it continues strategic spending on projects linked to Vision 2030, the kingdom’s ambitious plan to overhaul the economy.
On Sunday, Finance Minister Mohammed Al Jadaan approved the kingdom’s annual borrowing plan which estimates financing requirements of approximately 139 billion riyals ($37.02 billion) this year mainly to cover the 2025 deficit as well as about 38 billion riyals in debt maturities.
Saudi Arabia completes arrangement to secure $2.5bn credit facility
As part of the plan, the kingdom intends to take advantage of opportunities to diversify its local and international financing channels, including private transactions, and to tap new markets and currencies, it said in its Sunday statement.
Citi, Goldman Sachs International and JPMorgan are mandated global coordinators and joint bookrunners on the sovereign bond issue. BNP Paribas, First Abu Dhabi Bank, HSBC, Mashreq, SNB Capital and Standard Chartered Bank are acting as passive bookrunners.
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