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Middle East

Saudi Arabia Prices Triple-Trancher, Leaving a Few Bips on the Table

The Kingdom of Saudi Arabia hit the market for the first time in 2020 to place USD5bn in bonds across three tranches, including a 35-year tranche – the country’s longest to date.

Jan 22, 2020 // 10:30AM

Saudi Arabia sold USD1.25bn in 7-year debt at a spread of UST+85bp, USD1bn in 12-year notes at a spread of UST+110bp, and USD2.75bn at a yield of 3.84%, according to Bloomberg data. Citigroup, Morgan Stanley and Standard Chartered coordinated the sale while acting as lead managers, and BNP Paribas, HSBC, JP Morgan, and NCB Capital joined the deal as lead managers.

This is the first time the country or any GCC sovereign sold bonds in international markets this year, and the first time following the assassination of a high-ranking Iranian general in Iraq, with tensions having subsided since.

Saudi Arabia last tapped the market in November 2019 when it sold SAR1.416bn in domestic sukuk across three tranches – including a 2050 tranche. In October 2019 it placed a USD2.5bn 10-year sukuk at a spread of MS+150bp.

The country plans to raise USD32bn in debt this year to finance the budget deficit, and will need to refinance at least UDS12bn in debt, according to data from JP Morgan.

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