Saudi Arabia Returns to Dollar-Debt Market to Boost Finances

Saudi Arabia sold a two-part dollar bond as countries in the Gulf Arab region raise cash buffers to weather low oil prices and the coronavirus pandemic, Bloomberg News reported. The world’s largest crude exporter priced $5 billion in bonds on Tuesday. The $2.75 billion 12-year notes were priced at 130 basis points over 10-year U.S. Treasuries, compared with guidance of 140 basis points and initial price talk of 165. The $2.25 billion 40-year security were priced at 3.45%, versus guidance in the 3.55% area and initial price talk of 3.75%. The yield on its debt due 2060 was at 3.46% at 4 p.m. in New York. Even before the kingdom’s offering, the Gulf Arab region was already seeing the busiest start to the year since 2019 for bond sales, with Oman and Bahrain raising a combined $5.25 billion this month. The price of Brent crude is still below what most of the region’s economies need to balance their budgets. Saudi Arabia’s dollar bonds have lost 1% since the start of year, making them the worst performer among Gulf Arab peers. Read more.