Saudi Arabia has followed fellow oil exporters in the Gulf region by raising up to US$17.5bn from international investors in the global bond market.
The success of the offering, surpassing Argentina’s successful US$16.5bn in April, sets a record for an emerging market. Strong demand enabled Saudi Arabia, the world’s largest exporter of oil, to tighten pricing for the multi-tranche, US dollar-denominated bond.
“It is no surprise to see high demand from both local and international investors for Saudi Arabia’s debut sovereign bond issue,” Mohieddine Kronfol, chief investment officer (CIO) of global sukuk and Middle East/North Africa (MENA) fixed income at Franklin Templeton Investments told the Wall Street Journal. “Initial price guidance was in line with what we were expecting.”
Reports suggest that Saudi’s debut issue will comprise three maturities of five, 10 and 30 years priced at yields of around 2.63%, 3.44% and 4.64% respectively. The prices are far lower than initial price guidance, which had indicated that the new benchmark 10-year borrowing rate would come in at 3.6%.
The offering is part of plans to lessen the kingdom’s heavy reliance on oil revenue and its ministers have promoted the bonds via roadshows mounted over recent weeks to international investors. The slump in oil prices over the past two years has sharply cut Saudi revenues and pushed up its deficit, forcing a reining in of welfare benefits
Proceeds of the offering were at the upper end of the US$10bn-20bn that the country expected to raise, while orders are reported to have come in at around US$67bn against a previous projection of US$50bn. This success is now likely to encourage government-related entities in going ahead with their own bond offerings.
The distributed ledger platform developed by the trio allows major steps in a crude oil transaction to be digitised on the blockchain.
Cyber criminals are building “an army of things” that has the potential to impact the future of the digital economy, according to a ... read more
The US treasury secretary identified cybersecurity as his primary concern, but doesn’t regard artificial intelligence as an immediate threat to American jobs.
The venture between Frost & Sullivan and blockchain funder Outlier Ventures identifies 130 major blockchain start-ups worldwide.