DUBAI, Nov 9 (Reuters) – Saudi Arabia sold $3.25 billion in dual-tranche bonds on Tuesday comprising a sukuk tranche and a conventional portion in its third international bond sale of the year, a term sheet viewed by Reuters showed.
The world’s top oil exporter sold $1.25 billion in 30-year bonds at 3.36% and $2 billion in sukuk due in May 2031 at 90 basis points over U.S. Treasuries (UST), the term sheet showed.
Guidance was tightened after orders peaked over $11.5 billion earlier on Tuesday. Initial guidance was around 3.6% for the conventional and around 110 bps over UST for the sukuk.
Orders at final guidance were over $4.1 billion for the conventional tranche and $6.9 billion for the sukuk.
The deal was expected between $2.5 billion and $3 billion but strong demand allowed it to launch on the low end of final guidance while still increasing the size. read more
BNP Paribas (BNPP.PA), Citi (C.N), Goldman Sachs (GS.N) , JPMorgan (JPM.N) were global coordinators and joint bookrunners on both tranches and Al Rajhi Capital was a passive joint lead manager and book runner on the sukuk, the term sheet showed.
Saudi Arabia raised $5 billion in 12- and 40-year bonds in January and 1.5 billion euros ($1.73 billion) with three- and nine-year bonds in February.
Reuters reported on Monday the kingdom is in talks with banks to amend the terms of a $16 billion loan due in 2023 and possibly reduce the size of the facility as it looks to cut outstanding government debt and improve its balance sheet. read more
Saudi Arabia raised $5 billion in January 2020 and followed that with a $7 billion bond sale in April last year after its finances were hit by record-low oil prices and the pandemic’s impact.
But higher oil production and prices helped bolster the largest Arab economy’s finances. The kingdom recorded its first quarterly surplus in over two years – 6.7 billion riyals ($1.79 billion) – in the third quarter.
Moody’s on Friday upgraded Saudi Arabia’s outlook to “stable” from “negative”, saying it was likely to reverse most of its 2020 debt increase while preserving fiscal buffers.
It estimated government debt will decline below 29% of gross domestic product by the end of this year and to around 25% of GDP by 2025, from 32.5% of GDP last year.
($1 = 0.8655 euros)
($1 = 3.7508 riyals)
Reporting by Yousef Saba; Editing by Peter Graff and Dan Grebler
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