Saudi Arabia raised $12B through a three-part bond sale, drawing strong investor interest, the National Debt Management Center (NDMC) reported on Tuesday. The funds will help address the country’s budget deficit, repay maturing debt, and support its wide-ranging economic diversification projects.
The NDMC disclosed that Saudi Arabia sold $5B, $3B, and $4B in bonds with maturities of three, six, and ten years, respectively, attracting total orders of approximately $37B.
The pricing for the shortest tranche of the $5B issuance was reduced by 35 basis points (bps) from initial guidance, settling at 85 bps over US Treasuries, yielding 5.18%. The $3B notes were priced at 100 bps over, yielding 5.44%, while the $4B bond offered a yield of 5.73%.
“The bid-to-cover ratio shows strong demand for the kingdom’s bonds, demonstrating investor confidence in Saudi Arabia’s economic strength and future investment opportunities,” the NDMC said.
On Sunday, the NDMC estimated Saudi Arabia’s funding needs for 2024 at $37B (SAR 139B), with more than SAR 100B allocated for the budget deficit and the rest to settle maturing debt.
The Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, secured a $7B Murabaha credit facility on Monday to support Vision 2030 initiatives.
Saudi Arabia expects a fiscal deficit of $27B in 2025. The government plans to explore diverse funding options, including private investments and new international markets.
The kingdom is also seeking loans. Last week, Saudi Arabia secured a $2.5B three-year revolving credit facility from Abu Dhabi Islamic Bank, Credit Agricole, and Dubai Islamic Bank.
