Saudi Arabia set to land bond market

Saudi Arabia is set lo launch its first international bond on Wedsneday, as the Financial Times reported; the initial price guidance of the bond is set to be somewhere between $10 billion and $15 billion, the largest ever from West Asia. The final figure will be released on Tuesday.
It comes at a time where Saudi Arabia is looking to plug the budgetary deficit it has had since the drop in oil prices last year.

Saudi banks also have a "lot of room to increase bond issuance," said Meijer, the Dubai-based head of research at investment bank Arqaam Capital, who highlighted that lenders' liabilities in the country comprise almost no foreign-currency bonds, compared with between 5% and 20% for those in the United Arab Emirates. "Bonds are long-term funding and are a lot more stable than deposits," he said.

The english newspaper added that investors who had already met with Saudi delegates are expecting the bond yield to be somewhere between 160 and 200 basis points over their equivalent US government benchmarks.

Delegates from the kingdom were in the US and UK last week preparing for a bond which may break records and set the scene for a number of other deals, including the world’s biggest ever IPO from Saudi state oil giant Aramco.