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.
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Rothschild & Co. and Moelis & Co. have been shortlisted to advise on restructuring about $15 billion of debt at Saudi Arabia’s biggest construction firm, according to people with knowledge of the matter, Bloomberg News reported. The boutique banks made pitches to Saudi Binladin Group last month for what would be one of the Middle East’s biggest debt revamps, the people said, asking not to be identified because the matter is private.
Fitch Ratings has downgraded Saudi Arabia, citing vulnerabilities in the kingdom’s economic infrastructure after attacks on oil facilities this month knocked out half of its crude production, the Financial Times reported. The New York-based rating agency on Monday dropped Saudi Arabia’s long-term foreign currency issuer default rating to A from A+, with a stable outlook. Fitch said the downgrade followed the escalation in geopolitical and military tension in the Gulf as well as deteriorating fiscal and external balance sheets.
Billionaire Mukesh Ambani’s Reliance Industries Ltd. is on a mission to reduce debt after racking up $76 billion in capital expenditure in the last five years, Bloomberg News reported. The conglomerate aims to be a zero-net-debt company in 18 months, Asia’s richest man told shareholders Monday. Aiding that effort would be a decision to sell 20% of Reliance’s oil-to-chemicals business to Saudi Arabian Oil Co., or Aramco, at an enterprise value of $75 billion. The company will also start preparing to list its retail and telecommunications units within five years, Ambani said.
This isn’t the first time Saudi Arabia has deployed the whatever-it-takes weapon to beat back the bears. In May 2017, energy minister Khalid Al-Falih used that exact phrase when Brent crude had slipped below $50 a barrel, a Bloomberg View reported. It sparked a brief rally, followed by a brief dip again, that ultimately segued into a sustained march toward $86 by the fall of 2018. It’s different this time. As bleak as things seemed to OPEC in May 2017, the organization actually had some favorable trends going its way.
The Saudi Binladin Group is seeking a financial adviser for a restructuring of the group’s debt, which could range between $20 and $30 billion, sources familiar with the matter said. The move is the latest in state efforts to restructure the construction giant, in which the Saudi government took a roughly one-third stake from Bin Laden family members that were swept up in an anti-graft campaign that Riyadh launched in late 2017, Reuters reported.
Saudi Arabia plans to issue a debut euro-denominated bond, part of a borrowing binge to meet the government’s ambitious spending targets, The Wall Street Journal reported. The bond is aimed at diversifying Saudi Arabia’s investor base, following predominantly dollar debt that has catapulted the kingdom up the ranks of emerging-market bond issuers. Subject to market conditions, Saudi Arabia is seeking to issue the bond in tranches of eight and 20 years, according to a marketing document provided by one of the arrangers Monday. The exact timing of the issuance isn’t clear.
A Saudi commercial court has accepted a filing by conglomerate AHAB to have its decade-long dispute with creditors resolved under the kingdom’s new bankruptcy law, and rejected a demand to liquidate the company filed by two of its creditors, sources familiar with the matter said, Reuters reported. The bankruptcy filing was seen as a key test of Saudi Arabia’s new law for handling insolvency disputes, which became effective last year as part of reforms aimed at making the country more investor friendly.
A Saudi court has rejected two applications from conglomerate Ahmad Hamad Algosaibi and Brothers (AHAB) to have its decade-long dispute with creditors resolved under the kingdom’s new bankruptcy law, AHAB said on Tuesday, Reuters reported. The case was seen as a key test of the kingdom’s new regime for handling insolvency disputes. Creditors have been pursuing AHAB and Saad Group, another Saudi conglomerate, since they defaulted on about $22 billion in combined debt in 2009.
Saudi conglomerate Ahmad Hamad Algosaibi and Brothers (AHAB) said on Wednesday it had filed last week for a financial restructuring under Saudi Arabia’s new bankruptcy law, as it seeks to end a decade-long dispute with creditors, Reuters reported. Saudi Arabia’s bankruptcy law, which came into effect in August, is an important step towards making the kingdom more investor friendly, offering a legal framework to struggling companies seeking to restructure debt following the 2009 global financial crisis and, more recently, weaker oil prices.