(Bloomberg) — Saudi Arabia sold bonds and Islamic securities, while offering to buy back some of its existing debt.
Most Read from Bloomberg
The world’s biggest oil exporter priced a $2.5 billion sale of sukuk bonds maturing in six years and $2.5 billion in dollar notes due in 10 years, paying 105 basis points and 150 basis points over similarly dated US Treasuries, respectively, according to a person familiar with the matter who’s not authorized to speak publicly and asked not to be identified. It’s the kingdom’s first foray into international debt markets since November.
At the same time, Saudi Arabia asked holders of its $15.5 billion of bonds due in 2023, 2025 and 2026 to tender their notes for purchase by the kingdom for cash. The tender deadline is Oct. 24.
“Saudi Arabia does not really need the money,” said Abdul Kadir Hussain, head of fixed-income asset management at Dubai-based Arqaam Capital. “This is a good way to keep engaged with the international debt capital markets, while undertaking some liability management in terming out its debt maturities.”
Bonds issued by Gulf Arab states have outperformed their emerging-market peers this year as elevated oil prices boost their fiscal and current-account positions. Investors are also gravitating to more highly rated debt amid growing fears of a global recession. Saudi Arabia is rated A1 by Moody’s Investors Service, its fourth-highest grade.
The kingdom had set a price guidance of 110 basis points over Treasuries for the sukuk, down from initial price talk of about 135 basis points, the person said. It trimmed the guidance for the 10-year bond to a yield premium of 155 basis points from about 180 basis points.
BNP Paribas SA, Goldman Sachs Group Inc. and HSBC Holdings Plc are the bookrunners and dealer managers for the offering.
(Updates with deal pricing details in second paragraph.)
Most Read from Bloomberg Businessweek
©2022 Bloomberg L.P.
Read More:Saudi Arabia Sells Bonds, Plans $15.5 Billion Debt Buyback
2022-10-19 00:00:00
