Saudi Arabia Sells $2.5 Billion Sukuk, Gets Hefty Demand

Saudi Arabia sold sukuk, or Islamic bonds, worth $2.5 billion on Tuesday after receiving large demand for its first international debt sale since an assault on its oil facilities last month, Reuters reported. The strikes, which initially halved Saudi crude output, led to a rating downgrade by Fitch, which cited raised geopolitical risks and the possibility of further attacks. The sukuk offer a profit rate equivalent to 127 basis points over mid-swaps, a document showed. That is around 20 basis points below the level at which the bonds were marketed earlier on Tuesday, a sign that hefty demand allowed the kingdom to tighten the pricing. One source close to the deal said orders for the deal had peaked to nearly $14 billion. Saudi Arabia has borrowed extensively over the past few years to offset the impact of lower oil prices on state revenue. Read more