Bonds

Saudi Arabia starts selling triple-tranche dollar bonds

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Key Points
  • Saudi Arabia started marketing on Tuesday U.S.dollar denominated bonds split into tranches of seven, 12 and 35 years, a document showed, as the kingdom taps international investors as part of plans to raise $32 billion worth of debt this year.
  • It is offering initial price guidance of around 110 basis points (bps) over U.S. Treasuries for the seven-year paper, 135 bps over the benchmark for the 12-year tranche, and 180 bps over for the 35-year, a document by one of the banks leading the deal showed.
  • The new debt sale, which is expected to close later on Tuesday, will be of benchmark size, meaning each tranche is expected to be at least $500 million, according to the document.
Skyline of Riyadh in Saudi Arabia.
Simon Dawson | Bloomberg | Getty Images

Saudi Arabia started marketing on Tuesday U.S.dollar denominated bonds split into tranches of seven, 12 and 35 years, a document showed, as the kingdom taps international investors as part of plans to raise $32 billion worth of debt this year.

Riyadh has been borrowing extensively over the past few years, locally and internationally, to tap new financing channels in an era of lower oil prices.

It is offering initial price guidance of around 110 basis points (bps) over U.S. Treasuries for the seven-year paper, 135 bps over the benchmark for the 12-year tranche, and 180 bps over for the 35-year, a document by one of the banks leading the deal showed.

Citigroup, Morgan Stanley and Standard Chartered are joint global coordinators and lead managers, and BNP Paribas, HSBC, JPMorgan and NCB Capital have been hired as passive lead managers.

Of the total debt plans for this year, almost $12 billion will be to refinance existing local debt, and will be done locally, a finance ministry official told Reuters last month.

That leaves around $20 billion-worth of new funds that Riyadh plans to raise in the local and international markets, with the international debt accounting for 45% of the fundraising plans, the official said.

The new debt sale, which is expected to close later on Tuesday, will be of benchmark size, meaning each tranche is expected to be at least $500 million, according to the document.