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Saudi Arabia joins Gulf dollar bond binge with new debt offering

Saudi Arabia joins Gulf dollar bond binge with new debt offering

Saudi Arabia is offering the 40-year tranche at about 5.15 per cent

Saudi Arabia is marketing a dollar debt offering, joining Gulf counterparts that have recently sold bonds after the Covid-19 pandemic prompted shutdowns and a plunge in oil prices.

The biggest Arab economy is offering 5.5-, 10.5- and 40-year notes. It comes just days after Qatar and Abu Dhabi debt sales received strong responses from investors.

Saudi Arabia itself raised $5bn in January via an offshore issuance.

Even as the size of the current offering isn’t yet clear, Finance Minister Mohammed Al-Jadaan that month said the kingdom may raise an additional $4bn in international bonds this year.

Successful dollar note sales by Indonesia last week and Malaysian oil giant Petroliam Nasional Bhd. this week indicate strong investor appetite for high-rated issuers.

While there has been a record amount of dollar bond sales in recent weeks as borrowers build up cash piles amid the pandemic, they have been paying up for it.

Saudi Arabia is offering the 40-year tranche at about 5.15 per cent. The longest tranche in its January deal was 35 years, which priced at 3.84 per cent.

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